RAREX LIMITED — Capital/Financing Update 2019

Oct 6, 2019

ASX / MEDIA ANNOUNCEMENT

7 October 2019

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SIGNIFICANT POTENTIAL AT NSW COPPER-GOLD PROJECTS

HIGHLIGHTS

• Sagon moves to 100% ownership of Cummins Range Rare Earth Project

• Completion of $1.17 million capital raising to institutional and sophisticated investors

• Maiden JORC 2012 Resource estimation underway

• Experienced mining executive Jeremy Robinson appointed as Executive Director

• High impact drill program to commence in the coming months

• Recent major discovery by Alkane at its Boda prospect upgrades prospectivity of Sagon’s New South Wales Copper Gold Projects

• Sagon’s 100% owned Cundumbul Block located 20km south of Boda prospect with previous exploration indicative of a proximal copper-gold porphyry environment

• Sagon’s 100% owned Trundle Block indicates strong IP target adjacent to previously reported copper gold mineralisation, with historical drill results including:

• 48m at 0.12 g/t Au, 0.14% Cu and 40ppm Mo (open down hole)

• 56m at 0.88 g/t Au and 0.35% Cu from 34m, including

  • 2m at 20g/t Au and 6.97% Cu from 64m

• 58m at 0.44g/t Au and 0.17% Cu from 22m, including

  • 4m at 1.19g/t Au and 0.41% Cu from 28m

• 42m at 0.45g.t Au from 32m, including

  • 6m at 0.99g/t Au from 38m

• Multiple other projects owned by Sagon in the region under review

• Modest exploration program including drilling currently planned

Background

Sagon Resources Limited (ASX:SG1) (“ Sagon ” or “ the Company ”) would like to update the market on its current strategy and reinvigorated focus on its NSW Copper Gold Projects in light of the recent and significant discovery made by Alkane Resources Limited (ASX: ALK) (“ Alkane ”) at their Boda Copper Gold porphyry prospect (refer to Alkane ASX announcement 9[th] September 2019).

Sagon holds 7 tenements in the region and is currently sole funding exploration on 6 of these tenements. Extensive work programs have been completed on the projects over the previous 10 years. While all 7 tenements are prospective for Cadia Valley style copper-gold porphyry deposits the Cundumbul and Trundle project are of most interest and will be the immediate exploration focus of Sagon in the coming 3-6 months.

Sagon Resources Limited

Suite 23, 513 Hay Street, Subiaco WA 6008 Ph: 08 6143 6720 ACN: 105 578 756

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Figure 1 - Sagon NSW Copper Gold Projects

Trundle Block (EL8222)

Sagon’s Trundle project lies 30km west of the China Molybdenum Group owned Northparkes porphyry copper-gold mine (3.8Moz Au and 3.4Mt Cu) within an inferred westerly rifted portion of the Ordovician Northparkes Igneous Complex.

Previous work undertaken by Newcrest within the Trundle project in the 1990s identified several porphyry prospects. Sagon (then ‘Clancy Exploration Limited’) then completed RC drilling at the Trundle Park prospect which returned extensive skarn alteration with high grade copper and gold mineralisation including drill holes including:

• 56m at 0.88 g/t Au and 0.35% Cu from 34m, including

• 2m at 20g/t Au and 6.97% Cu from 64m

• 58m at 0.44g/t Au and 0.17% Cu from 22m, including

• 4m at 1.19g/t Au and 0.41% Cu from 28m

• 42m at 0.45g.t Au from 32m, including

• 6m at 0.99g/t Au from 38m

Refer to the announcement released by the Company on 28 February 2011 entitled “ Trundle Drilling Results – High grade gold and copper at Trundle Park ” for further information.

Sagon Resources Limited

Suite 23, 513 Hay Street, Subiaco WA 6008 Ph: 08 6143 6720 ACN: 105 578 756

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Further exploration in 2015 as part of the JV High Powered Exploration defined multiple Induced Polarisation “IP” geophysical targets of which one north of the Mordialloc target was drilled returning disseminated sulphides associated with an intrusion although no significant values were returned. Despite this a strong target remains at Mordialloc with a significant IP target lying adjacent to the contact of a coarse grained porphyry intrusion and andesite host rock where previous drilling by Calibre mining in 2010 that returned highly anomalous mineralisation (CTD: 48m at 0.12g/t Au and 0.14% Copper and 40ppm Molybdenum) which remains open downhole. The mineralisation is associated with quartz-sulphide sheeted veins and potassic alteration with a clayphyllic alteration both suggestive that it is marginal to a porphyry source of which the IP target is interpreted to represent. This remains a major copper gold porphyry target.

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Figure 2 - Sagon Trundle Project

Cundumbul Block (EL6661)

The Cundumbul project lies in the central Molong High of the Ordovician Macquarie Arc which is host to the giant Cadia Copper Gold Porphyry Mine (48.7Moz of Gold and 6.5Mt of Copper) and the recently discovered Alkane Boda porphyry prospect only 20km to the North.

Previous work undertaken on the prospect funded by Mitsubishi Materials Company identified two key prospects on the tenement, known as Andrews and Bell. The most advanced of the projects, Bell, was drilled with RC and Diamond methods and intersected high grade Molybdenum mineralisation in multiple holes with the best intersection of 4m at 0.17% Molybdenum from 168m in CNRC010 in a heavily faulted area with extensive alteration and quartz pyrite veining, phyllic

Sagon Resources Limited

Suite 23, 513 Hay Street, Subiaco WA 6008 Ph: 08 6143 6720 ACN: 105 578 756

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alteration and widespread elevated molybdenum. It is well known that porphyry deposits are zoned, and the classic porphyry model has this assemblage above the copper bearing porphyry source with accompanying higher temperature (potassic) alteration assemblages.

Refer to the announcement released by the Company on 3 December 2014 entitled “ Molybdenum Discovered at the Cundumbul Project – Significant intercepts in the Molong Volcanic Belt, NSW ” for further information.

Deeper drilling is required at this prospect to asses zonation of the system. These indications coupled with the recent success of Alkane at the Boda prospect have greatly enhanced the potential of this prospect and it is now considered a major copper gold porphyry target.

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Figure 3 - Sagon Cundumbul Project

Sagon Resources Limited

Suite 23, 513 Hay Street, Subiaco WA 6008 Ph: 08 6143 6720 ACN: 105 578 756

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Other Tenements

Sagon also retains interests in the Fairholme project (EL6552 and EL6915) 15km north of the Cowal Gold Mine owned by Evolution Mining Limited, Condobolin (EL7748), Orange East (EL8442) and Jemalong (EL8502) which are also currently under review.

Work Program

In light of the recent discovery by Alkane and a review of the historical exploration results reported for Trundle and Cundumbul, Sagon is focused on completing a review of its NSW tenure. As part of this review, Sagon is developing an exploration plan and anticipates commencing exploration activities including drilling at both Trundle and Cundumbul in the next 3-6 months subject to further review and receiving the relevant approvals and permitting.

COMPETENT PERSONS STATEMENT

Information in this release that relates to Exploration Results is based on and fairly represents information and supporting documentation prepared by Mr Joe Treacy, a Member of the Australasian Institution of Mining and Metallurgy and the Australian Institute of Geoscientists. Mr Treacy is a consultant to Sagon Resources Limited and shareholder. Mr Treacy has sufficient experience which is relevant to the styles of mineralisation and types of deposits under consideration and to the activities being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Treacy consents to the inclusion in this release of the matters based on his information in the form and context in which it appears.

The Exploration Results in this announcement in relation to the Trundle Block (EL8222) and the Cundumbul Block (EL6661) was prepared and first disclosed under the JORC Code 2004. This information has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.

REFERENCES

Alkane Resources Ltd ASX Release 9th September 2019

Clancy Exploration Limited ASX Release 3rd December 2014

Clancy Exploration Limited ASX Release 28th February 2011 Clancy Exploration Limited ASX Release 25th June 2010

Sagon Resources Limited Suite 23, 513 Hay Street, Subiaco WA 6008 Ph: 08 6143 6720 ACN: 105 578 756