REACH RESOURCES LIMITED — Capital/Financing Update 2021

Feb 16, 2021

ASX ANNOUNCEMENT/MEDIA RELEASE 17 February 2021

DIRECTORS:

Mr Collin Vost (Executive Chairman)

Mr Marcus Flis (Technical Director)

Mr Justin Vost (NonExecutive Director)

CAPITAL STRUCTURE:

Share on issue: 536,008,309 Options on issue: 25,750,000

Registered Office:

Shop 11, Southshore Piazza 85, The Esplanade, South Perth, WA, 6151

Postal address:

PO Box 1196 South Perth, WA, 6951

Ph: +61 (8) 6436 2300 admin@cervanantescorp.com.au www.cervantescorp.com.au

ASX : CVS Check and resplit assays received from Primrose drilling campaign

Key points:

• Verification and composite resplit assays from recent RC drilling at Primrose Gold Project received
• Results verify original samples and provide focus in intercepts previously assayed with 4 metre composites
• One metre resplit assays in the Pansy Pit include:
  • o 1m @ 2.17g/t from 12m in CVSRCP030
  • o 1m @ 10.17g/t from 17m in CVSRCP030
  • o 1m @ 5.03g/t from 6m in CVSRCP033
  • o 1m @ 4.45g/t from 4m in CVSRCP034
  • o 1m @ 6.76g/t from 6m in CVSRCP034
  • o 2m @ 2.82g/t from 0m in CVSRCP036
• Cervantes is undertaking a capital raising through a non-renounceable entitlement issue, the details of which are obtainable from our website including the prospectus and details on Shortfall Applications.
• The board is pleased with the progress of the capital raising, considering the Gold price had a sudden drop immediately after the raising was announced on the 15th January 2021 which has in the short term affected all gold companies.

Cervantes Corporation Limited (ASX:CVS) submitted verification samples from its recently reported drilling results from its flagship Primrose Gold Project in the Yalgoo district of WA (ASX release: 13 January 2021). Resampling was carried out to both confirm the previously announced results and to define grades and intercept thicknesses of gold-anomalous samples that were originally composited at four metre intervals.

Pansy Pit

Forty three verification assays have been completed. The correlation between the original sample assays and the repeat assays is summarised in Figure 1.

Figure 1 Correlation between the original sample gold assay and the repeat gold assay, Pansy Pit, Primrose Gold Project. For a perfect correlation all the points would plot on the red line.

The verification assays largely confirm the original results (ASX release: 13 January 2021) though the repeat assays do not exactly repeat the original assays. This indicates the gold mineralisation in the Pansy Pit is coarse, giving rise to a nugget effect in the assaying data. This is expected given the interpretation of this mineralisation as being late-stage quartz vein related.

Resplit samples from the original 2 and 4 m composites have been received for the Pansy Pit. A comparison between the original composite assays and the resplit 1m assays is shown in Table 1. The resplit assays defined a narrower high grade assays than the original composite sample assays, as expected. Hole collar locations are included as Appendix 1. Refer to Cervantes' announcement on 13 January 2021 for a location map and representative geological cross section.

Photo: Non-Executive Director Justin Vost in the field manually splitting the composite samples in 40 degree heat

Drill Hole	From(m)	To(m)	Compositeassay Au(g/t)	Resplitfrom (m)	Resplitto (m)	Au (g/t)
CVSRCP030	12	16	0.783	12	13	2.167
				13	14	0.46
				14	15	0.065
				15	16	0.065
	16	18	3.7085	16	17	0.14
				17	18	10.165
CVSRCP033	6	8	6.308	6	7	5.029
				7	8	0.349
CVSRCP034	4	8	3.402	4	5	4.449
				5	6	0.184
				6	7	6.761
				7	8	0.045
CVSRCP036	0	4	1.558	0	1	3.512
				1	2	2.121
				2	3	0.55
				3	4	0.101

Table 1 Comparison of composite sample assays and assays of samples resplit to 1m intervals.

The Company has held discussions with the Technical Director and an independent Geologist to plan a drilling program of some 20 – 25 verification and infill RC holes over the Blue Heaven area, where an Exploration Target has already been released on 17th July 2020, and slightly North thereof with the aim of moving the prospect to a JORC resource, and test highly prospective ground not previously explored. This will also be a precursor to deeper holes to test the potential of deeper mineralization, as indicated by a CSA Global report.

Figure 2 Primrose Shear conceptual gold target.

The Payne's Find historic gold mines occur on secondary structures associated with this shear. There are some 37 historical high grade mines still within the Primrose Project area.

Cervantes owns 100% of all mining licenses and prospecting licenses forming part of the project area, and the 6-7km Primrose shear is contained within these tenements, of which only some 5% has had any modern exploration.

Corporate

Cervantes is currently raising capital through a non-renounceable rights issue supported by a Prospectus, announced to the market on 15th January, 2021. This issue is not currently underwritten. Cervantes is in discussions with high-net worth individuals with a view to providing support for the shortfall from this raising, and discussions with other capital raising groups has been very encouraging. Other corporate actions are being considered to enhance the cash requirements for progress of the Company.

About Cervantes Corporation Limited

Cervantes is an emerging gold explorer and aspiring gold miner. It holds a commanding position in an oft-overlooked gold field that has had only sporadic, disjointed, and interrupted exploration carried out on it. Cervantes has identified opportunities in this gold field that were overlooked by previous explorers. The company is committed to maximizing shareholder value through the development of those opportunities.

About the Primrose Project

The Primrose Project covers in excess of 8km of the highly gold mineralised Primrose Shear in the Murchison District of the Eastern Goldfields, Western Australia. Over 37 gold mines operated in this field from 1911 till 1982. Some 79,915 ounces of gold was mined at an average grade of 28g/t during this period. It is generally accepted that significantly more gold than this was won from alluvial and unreported production.

Cervantes now controls mining leases and prospecting licences that cover the majority of this historic gold field. A large database of drilling, surface geochemistry, geological, and geophysical data has been assembled to allow the field to be better understood than at any time in its history.

Competent Person's Statement

The details contained in this report that pertain to exploration results are based upon information compiled by Mr Marcus Flis, Technical Director of Cervantes Corporation Limited. Mr Flis is a Fellow of the Australasian Institute of Mining and Metallurgy (AusIMM) and has sufficient experience in the activity which he is undertaking to qualify as a Competent Person as defined in the December 2012 edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (JORC Code). Mr Flis consents to the inclusion in the report of the matters based upon his information in the form and context in which it appears.

Forward Looking Statement

This report contains forward looking statements concerning the projects owned by Cervantes Corporation Limited. Statements concerning exploration targets may also be deemed to be forward looking statements in that they involve estimates based on specific assumptions. Forward-looking statements are not statements of historical fact and actual events and results may differ materially from those described in the forward looking statements as a result of a variety of risks, uncertainties and other factors. Forward looking statements are based on management's beliefs, opinions and estimates as of the dates the forward looking statements are made and no obligation is assumed to update forward looking statements if these beliefs, opinions and estimates should change or to reflect other future developments.

For Further information please contact:

Collin Vost Executive Chairman (08) 6436 2300 cvost@cervantescorp.com.au

APPENDIX I: Hole statistics

Hole ID	East(GDA94z50)	North(GDA94z50)	RLfromDEM	TotalDepthm	AzimuthTN	Dip	Tenement
CVSRCP030	567590	6762039	334.72	18	45o	60o	M59/662
CVSRCP033	567515	6762108	332.3	10	45o	60o	M59/662
CVSRCP034	567496	6762121	332.43	18	45o	60o	M59/662
CVSRCP036	567531	6762101	332.35	6	45o	60o	M59/662

JORC Code, 2012 Edition

Section 1 Sampling Techniques and Data (Criteria in this section apply to all succeeding sections.)

SamplingReverse circulation (RC) drilling samples were Nature and quality of sampling (eg cutchannels, random chips, or specifictechniquescollected through a rig-mounted cyclone withspecialised industry standardcollected in one metre intervals. Samples weremeasurement tools appropriate to thespear-sampled using multiple sampling pointsminerals under investigation, such asfrom the sample pile. RC drill chips (from eachdown hole gamma sondes, or handheldmetre interval) were examined visually andXRF instruments, etc). These exampleslogged by the geologist.should not be taken as limiting the broadmeaning of sampling.Any visual observation of alteration or of Include reference to measures taken tomineralisation was noted on the drill logs. Theensure sample representivity and theprospect is quartz related gold mineralisation;appropriate calibration of anycare was taken to log quartz content of themeasurement tools or systems used.chips. Aspects of the determination ofDuplicate samples comprise approximately 4%mineralisation that are Material to theof total samples taken (ie one duplicatePublic Report.submitted for every 25 samples). In cases where 'industry standard' workA company contract geologist supervised thehas been done this would be relativelysimple (eg 'reverse circulation drilling wasdrilling and sampling to ensure representused to obtain 1 m samples from which 3ativeness. Drilling was done by industrykg was pulverised to produce a 30 gstandard techniques.charge for fire assay'). In other cases moreDuplicates, were submitted to ensure assayingexplanation may be required, such asreliability and accuracy. Laboratory standardswhere there is coarse gold that hasinherent sampling problems. Unusualand blanks were used to monitor labcommodities or mineralisation types (egcontamination and accuracy.submarine nodules) may warrantHole locations were surveyed by hand held GPSdisclosure of detailed information.and by location onto 30cm resolution DEM andaerial photography.No downhole surveys were undertaken.DrillingDrilling was by Reverse Circulation (RC) with Drill type (eg core, reverse circulation,techniquesNQ sized bit and rods.open-hole hammer, rotary air blast, auger,Bangka, sonic, etc) and details (eg corediameter, triple or standard tube, depth ofdiamond tails, face-sampling bit or othertype, whether core is oriented and if so, bywhat method, etc).	Criteria	JORC Code explanation	Commentary

Criteria	JORC Code explanation	Commentary
Drill samplerecovery	 Method of recording and assessing coreand chip sample recoveries and resultsassessed.	RC sample recovery and sample quality wasrecorded via visual estimation of sample volumeand condition of the drill spoils.
	 Measures taken to maximise samplerecovery and ensure representative natureof the samples.	RC sample recovery was deemed as good withno loss of circulation reported.
	 Whether a relationship exists betweensample recovery and grade and whether	RC sample recovery was not problematic as thesamples were dry.
	sample bias may have occurred due topreferential loss/gain of fine/coarsematerial.	Relationships between recovery and grade arenot evident and are not expected given thegenerally excellent and consistently high samplerecovery.
		RC results are not utilised for Mineral Resourceestimations.
Logging	 Whether core and chip samples have beengeologically and geotechnically logged to alevel of detail to support appropriate	RC chips were geologically logged at one metreintervals into a digital database that was keptwith sample numbers.
	Mineral Resource estimation, miningstudies and metallurgical studies.	Logging is qualitative.
	 Whether logging is qualitative orquantitative in nature. Core (or costean,channel, etc) photography.
	 The total length and percentage of therelevant intersections logged.
Sub-samplingtechniques	 If core, whether cut or sawn and whetherquarter, half or all core taken.	One metre samples were collected from acyclone into a plastic bucket and then laid out on
and samplepreparation	 If non-core, whether riffled, tube sampled,rotary split, etc and whether sampled wetor dry. For all sample types, the nature, qualityand appropriateness of the samplepreparation technique. Quality control procedures adopted for allsub-sampling stages to maximise	the ground in rows of 10.
		Four metre composites were used at depths ofreduced interest or indications (eg, graniteintercepts may be sampled at four metres,sericite schists and quartz bearing intercepts at
		one metre.Mineralisation style is late stage quartz veins.
	representivity of samples. Measures taken to ensure that thesampling is representative of the in situmaterial collected, including for instanceresults for field duplicate/second-halfsampling. Whether sample sizes are appropriate to	The one metre samples are likely to downgradeactual grades intersected, but arecommensurate with minimum miningrequirements; sample size is consideredappropriate for resource estimation work.
	the grain size of the material beingsampled.
Quality ofassay data	 The nature, quality and appropriateness ofthe assaying and laboratory proceduresused and whether the technique is	Fire assay is a total digest technique and isconsidered appropriate for gold.
andlaboratorytests	considered partial or total. For geophysical tools, spectrometers,	Duplicates of 1 in every 25 samples weresubmitted.
	handheld XRF instruments, etc, theparameters used in determining theanalysis including instrument make and	The lab inserted random pulp duplicates,certified reference standards and blanks.
	model, reading times, calibrations factorsapplied and their derivation, etc.	Accuracy and precision levels have beendetermined to be satisfactory after analysis ofthese QA/QC samples.
	 Nature of quality control proceduresadopted (eg standards, blanks, duplicates,external laboratory checks) and whetheracceptable levels of accuracy (ie lack ofbias) and precision have been established.

Criteria	JORC Code explanation	Commentary
Verification ofsampling andassaying	 The verification of significant intersectionsby either independent or alternativecompany personnel. The use of twinned holes. Documentation of primary data, data entryprocedures, data verification, data storage(physical and electronic) protocols.	Analysis was by acqua regia using Intertek'sFA50/OE procedure: samples were pulverised tominus 75 µm before a split of 25g was taken andanalysed using standard Fire Assay procedures.The method is an accepted industry analyticalprocess appropriate for the nature and style ofmineralisation under investigation.
	 Discuss any adjustment to assay data.	There were no twinned holes.
		No adjustments were made to assay data.
Location ofdata points	 Accuracy and quality of surveys used tolocate drill holes (collar and down-holesurveys), trenches, mine workings andother locations used in Mineral Resourceestimation.	All samples sites have been located using ahand held GPS unit with an accuracy of +/-5m.These were cross-checked with a 0.3mresolution DEM and aerial photography.
	 Specification of the grid system used. Quality and adequacy of topographic	The drilling co-ordinates are all in GDA94 MGAZone 50 co-ordinates.
	control.	Azimuth was set by hand held compass therebeing no intensely magnetic rocks in the area.
		Drill hole inclination is set by the driller using aclinometer on the drill mast and checked by thegeologist prior to commencement of drilling.
		Camera survey points were at the top andbottom of each hole.
		Collar RLs were taken from the DEM data.
Data spacingand	 Data spacing for reporting of ExplorationResults.	RC holes were drilled on an existing grid set upfor resource drill out.
distribution	 Whether the data spacing and distributionis sufficient to establish the degree ofgeological and grade continuityappropriate for the Mineral Resource andOre Reserve estimation procedure(s) andclassifications applied. Whether sample compositing has beenapplied.	Together with historic data, the data spacing anddistribution will be sufficient to establish thedegree of geological and grade continuityappropriate for the Mineral Resource and OreReserve estimation procedure(s) andclassifications applied.
Orientation of	 Whether the orientation of sampling	Drilling followed the geometry of existing holes.
data inrelation togeologicalstructure	achieves unbiased sampling of possiblestructures and the extent to which this isknown, considering the deposit type. If the relationship between the drilling	Previous resource estimation defined the strikeand dip of ore zones. Current drilling utilisedthat information.
	orientation and the orientation of keymineralised structures is considered tohave introduced a sampling bias, thisshould be assessed and reported ifmaterial.	It is not anticipated that, on currentinterpretation, any bias has been introduced tothe sampling.
Samplesecurity	 The measures taken to ensure samplesecurity.	Samples were collected in calico bags withsample number tickets included in each bag andthe same identification posted externally.
		Samples were delivered to the lab by a companyrepresentative using commercial transportservices.
Audits orreviews	 The results of any audits or reviews ofsampling techniques and data.	Standards, blanks, repeats, and check assaysare undertaken to ensure data robustness.

Section 2 Reporting of Exploration Results. (Criteria listed in the preceding section also apply to this section.)

Criteria	JORC Code explanation	Commentary
Mineraltenement andland tenurestatus	 Type, reference name/number, locationand ownership including agreements ormaterial issues with third parties such asjoint ventures, partnerships, overridingroyalties, native title interests, historical	Exploration results relate to work carried outover a package of tenements comprising miningand prospecting leases.The tenements are 100% owned and controlled
	sites, wilderness or national park andenvironmental settings. The security of the tenure held at the timeof reporting along with any knownimpediments to obtaining a licence tooperate in the area.	by Cervantes Corporation Limited.All tenements and leases are currently in goodstanding with DMP with no known impedimentsto further exploration or development.
Explorationdone by other	 Acknowledgment and appraisal ofexploration by other parties.	Historical drill holes exist at the project area.
parties		Falcon Australia Ltd undertook a 21 hole drillingcampaign in 1987 from which they estimated anon-JORC Indicated Resource of 18,500t at4.28g/t gold for approximately 2,500oz (DMPreport A21516/M4741.)
Geology	 Deposit type, geological setting and styleof mineralisation.	The mineralisation is seen as predominantlyquartz veining in an undifferentiated maficsequence. Felsic intrusives are the likely driverof the gold mineralisation.
Drill holeInformation	 A summary of all information material tothe understanding of the explorationresults including a tabulation of thefollowing information for all Material drillholes:o easting and northing of the drill holecollaro elevation or RL (Reduced Level –elevation above sea level in metres) ofthe drill hole collaro dip and azimuth of the holeo down hole length and interceptiondeptho hole length. If the exclusion of this information isjustified on the basis that the informationis not Material and this exclusion does notdetract from the understanding of thereport, the Competent Person shouldclearly explain why this is the case.	See tables in this release.
Dataaggregationmethods	 In reporting Exploration Results, weightingaveraging techniques, maximum and/orminimum grade truncations (eg cutting ofhigh grades) and cut-off grades areusually Material and should be stated. Where aggregate intercepts incorporateshort lengths of high grade results andlonger lengths of low grade results, theprocedure used for such aggregationshould be stated and some typicalexamples of such aggregations should beshown in detail. The assumptions used for any reporting ofmetal equivalent values should be clearly	Simple averages are used where aggregatesare provided.Aggregated intercepts include contiguousmetres where the grade does not fall below0.5g/t for more than one metre.Reported aggregated intervals have beenweighted by length.No density weighting has been applied.No top-cuts have been applied (unless specifiedotherwise).Higher grade intervals of mineralisation internalto broader zones of mineralisation are reported

Criteria	JORC Code explanation	Commentary
		as included intervals.
		Metal equivalence is not used.
Relationshipbetweenmineralisationwidths andinterceptlengths	 These relationships are particularlyimportant in the reporting of Exploration	The intervals reported are the initial drill intervalsand intercepts.
	Results. If the geometry of the mineralisation withrespect to the drill hole angle is known, its	No adjustment has been to the intervals toaccount for the declination of drilling.
	nature should be reported. If it is not known and only the down holelengths are reported, there should be aclear statement to this effect (eg 'downhole length, true width not known').	Drilling is generally inclined at 60oto the NW(TN). Ore shoots generally dip approximately35oto the SE, meaning the apparent thickness isapproximately the true thickness; this needs tobe confirmed.
Diagrams	 Appropriate maps and sections (withscales) and tabulations of interceptsshould be included for any significantdiscovery being reported These shouldinclude, but not be limited to a plan viewof drill hole collar locations andappropriate sectional views.	Relevant location maps and figures are includedin the body of this announcement.
Balancedreporting	 Where comprehensive reporting of allExploration Results is not practicable,	Table of representative grades are included inthe report.
	representative reporting of both low andhigh grades and/or widths should bepracticed to avoid misleading reporting ofExploration Results.	This announcement includes the results of Auassays for the holes drilled as a follow-upprogramme to existing (reported) historic drilling.
Othersubstantiveexplorationdata	 Other exploration data, if meaningful andmaterial, should be reported including (butnot limited to): geological observations;geophysical survey results; geochemicalsurvey results; bulk samples – size andmethod of treatment; metallurgical testresults; bulk density, groundwater,geotechnical and rock characteristics;potential deleterious or contaminatingsubstances.	The area is covered by a 50m line spacedaeromagnetic survey.
		Previous workers undertook sufficient drilling todefine an Indicated Resource, though that is notnow JORC compliant.
		No bulk samples, metallurgical results,groundwater or geotechnical studies have beencarried out yet.
Further work	 The nature and scale of planned furtherwork (eg tests for lateral extensions ordepth extensions or large-scale step-outdrilling).	Work programmes currently under reviewinclude re-assaying of composite samples toone metre intervals,further drilling, metallurgicaltesting, resource estimation, and pit optimisation
	 Diagrams clearly highlighting the areas ofpossible extensions, including the maingeological interpretations and futuredrilling areas, provided this information isnot commercially sensitive.	studies.
		Any interpreted extension of the existingresource is commercially sensitive.

Section 3 Estimation and Reporting of Mineral Resources

No Mineral Resources are being reported.