PERPETUAL RESOURCES LIMITED — Capital/Financing Update 2021

May 16, 2021

ASX RELEASE

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17th May 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

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PROJECTS

Beharra Silica Sands Sargon Hub Eneabba Hub

CONTACT

Suite 801 Level 8 84 Pitt Street Sydney NSW 2000

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.

MOU for Silica Sand Offtake Signed with C&D Logistics Group

HIGHLIGHTS:

• MOU for offtake signed with China based C&D Logistics Group Co., Ltd (C&D Group)
• C&D Group is a wholly owned division of Xiamen C&D Co., Ltd which is a China State Owned Enterprise based in Xiamen City, China.
• MOU with C&D Group covers indicative interest to purchase 600,000 tons per annum of high grade silica sand from Beharra
• C&D Group is a supply chain logistics focused company actively sourcing raw materials for sale within China and also for provision to other C&D Group companies

Perpetual Resources Limited (ASX: PEC, "PEC", "Perpetual" or "the Company") is pleased to announce the signing of a Memorandum of Understanding ("MOU") with C&D Group Co. Ltd (C&D Group), with indicative interest from C&D Group for the purchase of 600,000 tons per annum of high grade silica sand from Perpetual's Beharra Project.

C&D Group is a division of China State Owned Enterprise Xiamen C&D Co., Ltd, which is a diversified supply chain and real estate development group. Xiamen C&D Co., Ltd is also the parent entity of a number of Shanghai Stock Exchange listed subsidiaries.

C&D Group's core business is supply chain sourcing and operations, with activities in a broad array of business sectors, including the following industries (among others);

• Metals and minerals
• Pulp and paper
• Food & Textiles
• Agriculture

• Energy & Chemicals

PEC's Executive Chairman, Mr. Julian Babarczy commented on the MOU, "After the announcement of our recent exciting metallurgical testing results, the market interest in Beharra silica sand continues to grow. We are encouraged by the interest shown in the Beharra end product by major Chinese supply chain business C&D Group, which is part of the broader group of companies headed by Xiamen C&D Co., Ltd, which is a significant supplier of raw materials to a vast array of industries throughout mainland China. We look forward to working with C&D Group in the months ahead on details of a potential Offtake Agreement".

Key details of the MOU with C&D

• Contemplates the purchase of 600,000 tons per annum of high-grade silica sand from the Beharra Project
• Parties agree to negotiate the terms of a legally binding Offtake Agreement, which will contain specific terms is respect of pricing and payment structure, by no later than 30th June 2022.
• MOU is binding on both parties, although non-exclusive until such time as a definitive offtake agreement is entered into

Negotiations around final product attributes, product pricing and payment terms will progress in coming months, with more definitive pricing discussions subject to the outcomes of the recently announced white-sand testing program, for which a drilling program is currently being finalized. Results of the white sand only bulk metallurgical testing program that will underpin these product and pricing discussions is expected to be finalized in July 2021.

Perpetual notes that there is no certainty that a binding Offtake Agreement will be reached as the finalization of such an agreement is the subject of ongoing negotiations.

Perpetual looks forward to updating shareholders when discussions develop.

About C&D Group

C&D Logistics Group Co., Ltd. is a subsidiary of Xiamen C&D Inc, which is itself a subsidiary of China State Owned Enterprise Xiamin C&D Co., Ltd and is a well-renowned company providing supply chain services including logistics and trading.

C&D Logistics Group owns logistics centers with warehousing capacity of more than 400,000 square meters with operations covering most of China's metropolitan cities including Xiamen, Tianjin, Qingdao, Chengdu and Guangzhou as well as over 200 global service sites. C&D Logistics Group has been successful in providing supply chain services to the metals and minerals, food & dairy products, agricultural products, chemicals, energy, light textile, liquor and other industries.

Xiamen C&D Co., Ltd (C&D Logistics Group's ultimate parent) is a State-Owned Enterprise based in Xiamen City. Founded in December 1980, the company is a large industrial investment enterprise group with an annual operating income of over 280 billion Yuan (US$43 billion) and total assets of more than 250 billion Yuan (US$38.5 billion), ranking 234th among the Global Fortune 500 companies in 2020.

Xiamen C&D Inc. (C&D Logistics Group's immediate parent) is a subsidiary of Xiamen C&D Co., Ltd. with supply chain operations and real estate development activities as its main businesses. Xiamen C&D Inc. is a listed public company with shares trading on the Shanghai Stock Exchange (stock code: 600153).

About Perpetual Resources Limited

Perpetual Resources Limited (Perpetual) is a focused explorer of silica sands, aiming to produce high purity silica and 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 the Mt Adams unsealed road providing access to the center of the tenure.

Mt Adams Road which Intersects the Beharra Tenement

Brand Highway Proximal to Beharra

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 single 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.

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