REACH RESOURCES LIMITED - Interim / Quarterly Report 2021

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JUNE 2021 QUARTERLY ACTIVITY REPORT

Cervantes Corporation Ltd (ASX:CVS) (“the Company” or “Cervantes”) is pleased to provide the June quarter activity report.

SUMMARY

Reinstatement to Official Quotation

Cervantes was successfully reinstated to Official Quotation on the ASX on Friday, 4 June 2021, following completion of the Company’s recapitalisation.

Definition drilling kicks off at Primrose Gold Project

On 16 June 2021, the Company announced the planned 3,000 metre Reverse Circulation (RC) drilling program had started at the Primrose Gold Project.
Drilling being undertaken to progress the Exploration Target announced 16 July 2020. Previous intercepts include:
12m @ 6.62g/t from 10m in PFRC116
3m @ 9.28g/t from 47m in HPFRC17
7m @2.43g/t from 26m in PFCR115
Drilling will also be undertaken on the periphery of the Exploration Target to pursue gold mineralisation in areas not yet closed off by previous drilling
An as yet untested potentially large tonnage primary gold mineralisation target identified by CSA will have its first drill test
Historic Lines of Lode, never before drill tested also targeted to assess their potential.

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PRIMROSE GOLD PROJECT

Following a successful recapitalisation and re-quotation on the ASX, Cervantes Corporation Limited (ASX:CVS) was pleased to advise that drilling had commenced on its flagship Primrose Gold Project in the Yalgoo district of WA (Figure 1), as announced on 16 June 2021. A campaign of approximately 3,000m of Reverse Circulation (RC) drilling to focus on the Blue Heaven Exploration Target (ASX release on 16 July, 2020), an untested primary gold mineralisation target, and a number of as yet untested historic gold lodes.

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Figure 1 Primrose Gold Project location.

Blue Heaven

The Blue Heaven area covers the core of the historic Paynes Find gold field. It was the major focus of the previous explorer’s drilling activities. During 2020, Cervantes reviewed this data and confirmed and rectified collar locations with a high definition digital elevation survey supported by spot DGPS on the ground surveying.

Verification and infill drilling was started in support of converting this Exploration Target to a JORC resource, and to test highly prospective ground not previously drilled.

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The following historic intercepts will be retested with the following drill holes (Table 1):

Table 1 Significant gold intersections from previous drilling.

				Within
Drill Hole	Interval (m)	Gold (g/t)	From (m)	broader interval	Gold (g/t)	From (m)
				(m)
HPFRC17	3	9.28	46	7	4.32	46
HPFRC19	2	14.7	21	4	8.46	20
and	4	8.43	8
PFRC010	2	2.49	18	10	1.53	18
PFRC115	3	4.34	30	7	2.43	26
and	4	1.91	16
PFRC116	6	11.49	12	12	6.62	10
PFRC120	1	271.63	41	3	92.1	41
and	1	1.52	35
PFRC135	3	8.05	77	7	4.83	77
and	2	3.6	48
PFRC149	3	4.64	41	9	2.16	41
PFRC150	3	5.85	120	6	3.56	120
and	2	12.04	79

In addition, in-fill and extensional drilling will be undertaken in areas that have gaps in the drilling or the mineralisation is not closed off.

Primrose Shear Conceptual Gold Target

Prior to the previous explorer exiting the field, CSA Global was commissioned to undertake a review of the geological data for the purpose of improving the understanding of the structural and lithostratigraphic controls on mineralisation in this gold field. CSA recognised two gold mineralising events:

Shear related quartz veining with high grade gold tightly bound within segmented and boudinaged quartz veins within the gneiss lithologic units – the main target for the historic mining activities. This is interpreted to represent remobilised gold.
Moderate grade, but more consistent gold mineralisation along the sheared contact between mafic amphibolite and gneiss that is interpreted as the primary gold mineralising event.

The previous explorer focused on the first style and it is this style that represents all of the historic Paynes Find gold mines. These mines are developed on secondary structures associated with the Primrose Shear. Over 37 historic mines occur within the area.

The second style, interpreted to be closely associated with the Primrose Shear itself (Figure 2), has not been well tested. Historic drill hole PFRC116 (Table 1) may possibly represent this style, having a thicker intercept with moderate grade. This style has been overlooked up until now as it is not generally associated with quartz veining.

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Figure 2 Primrose Shear conceptual gold target.

Exploration Drilling

Many of the known Lines of Lode, i.e., major quartz veins along which shallow mines have been developed, have never been tested by drilling. The drilling campaign announced on ASX on 16 June 2021 is designed to undertake an initial testing of these to gauge their potential.

CORPORATE

Cervantes was successfully reinstated to Official Quotation on the ASX on Friday, 4 June 2021, following completion of the Company’s recapitalisation.

MATERIAL EVENTS SUBSEQUENT TO THE END OF QUARTER

There were no material events subsequent to the end of the quarter.

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GUIDENCE NOTE 23 DISCLOSURES

Details of mining exploration activities

Details of exploration activities during the quarter are set out above.

The $32,000 of exploration and evaluation expenditure largely comprises geological staff, tenement administration and maintenance costs.

Details of mining production and development activities

No production and development activities were undertaken during the quarter.

Details of tenement activities

The tenement schedule included below shows all holdings and any change for the Company and its subsidiaries.

Details of related party payments

The aggregate amount of payments to related parties and their associates included in the current quarter cash flows from operating activities was $35,000, comprising Directors fees and superannuation.

This report has been authorised for release to ASX by the Chairman.

-ENDS-

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About Cervantes Corporation Limited

Cervantes is an emerging gold explorer and aspiring gold miner. It has built up a portfolio of gold properties in a well-known and historically producing gold district with a strategy to apply novel exploration and development thinking. The company is committed to maximising 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 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.

No New Information

Except where explicitly stated, this announcement contains references to prior exploration results, all of which have been cross-referenced to previous market announcements made by the Company. The Company confirms that it is not aware of any new information or data that materially affects the information included in the relevant market announcements.

Forward Looking Statement

This report contains forward looking statements concerning the projects owned by Cervantes Corporation Limited. If applicable, statements concerning mining reserves and resources 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.

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SCHEDULE OF TENEMENTS As at 30 June 2021

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Interest at Interest at Acquired Disposed
Project / Tenement Start of End of During the During the
Quarter Quarter Quarter Quarter
Primrose Project - Western Australia
Paynes Find M59/002 100% 100% - -
Paynes Find M59/010 100% 100% - -
Paynes Find M59/235 100% 100% - -
Paynes Find M59/244 100% 100% - -
Paynes Find M59/396 100% 100% - -
Paynes Find M59/662 100% 100% - -
Paynes Find M59/663 100% 100% - -
Paynes Find P59/2076 100% 100% - -
Paynes Find P59/2094 100% 100% - -
Paynes Find P59/2101 100% 100% - -
Paynes Find P59/2130 100% 100% - -
Paynes Find P59/2151 100% 100% - -
Paynes Find P59/2152 100% 100% - -
Paynes Find P59/2153 100% 100% - -
Paynes Find P59/2159 100% 100% - -
Paynes Find P59/2160 100% 100% - -
Paynes Find P59/2161 100% 100% - -
Paynes Find P59/2174 100% 100% - -
Paynes Find L59/184 100% 100% - -
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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

+Rule 5.5

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Name of entity

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Cervantes Corporation Ltd
ABN Quarter ended (“current quarter”)
79 097 982 235 30 June 2021
Consolidated statement of cash flows Current quarter Year to date
$A’000 (12 months)
$A’000
1. Cash flows from operating activities
1.1 Receipts from customers - -
1.2 Payments for
(a) exploration & evaluation (if expensed) (32) (206)
(b) development - -
(c) production - -
(d) staff costs (24) (97)
(e) administration and corporate costs (381) (609)
1.3 Dividends received (see note 3) - -
1.4 Interest received - -
1.5 Interest and other costs of finance paid - (1)
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 (437) (913)
activities
2. Cash flows from investing activities
2.1 Payments to acquire:
(a) entities - -
(b) tenements - -
(c) property, plant and equipment - -
(d) exploration & evaluation - -
(e) investments - -
(f) other non-current assets - -
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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 and oil and gas exploration entity quarterly report

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Consolidated statement of cash flows Current quarter Year to date
$A’000 (12 months)
$A’000
2.2 Proceeds from the disposal of:
(a) entities - -
(b) tenements - -
(c) property, plant and equipment - -
(d) investments 11 360
(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 11 360
activities
3. Cash flows from financing activities
3.1 Proceeds from issues of equity securities
(excluding convertible debt securities) 3,367 3,367
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 (346) (346)
securities or convertible debt securities
3.5 Proceeds from borrowings 45 60
3.6 Repayment of borrowings (596) (621)
3.7 Transaction costs related to loans and - -
borrowings
3.8 Dividends paid - -
3.9 Other (provide details if material) (22) (22)
3.10 Net cash from / (used in) financing 2,448 2,438
activities
4. Net increase / (decrease) in cash and
cash equivalents for the period
4.1 Cash and cash equivalents at beginning of 12 149
period
4.2 Net cash from / (used in) operating (437) (913)
activities (item 1.9 above)
4.3 Net cash from / (used in) investing activities 11 360
(item 2.6 above)
4.4 Net cash from / (used in) financing activities 2,448 2,438
(item 3.10 above)
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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 and oil and gas exploration entity quarterly report

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Consolidated statement of cash flows Current quarter Year to date
$A’000 (12 months)
$A’000
4.5 Effect of movement in exchange rates on - -
cash held
4.6 Cash and cash equivalents at end of 2,034 2,034
period
5. Reconciliation of cash and cash Current quarter Previous quarter
equivalents $A’000 $A’000
at the end of the quarter (as shown in the
consolidated statement of cash flows) to the
related items in the accounts
5.1 Bank balances 2,034 12
5.2 Call deposits - -
5.3 Bank overdrafts - -
5.4 Other (provide details) - -
5.5 Cash and cash equivalents at end of 2,034 12
quarter (should equal item 4.6 above)
6. Payments to related parties of the entity and their Current quarter
associates $A'000
6.1 Aggregate amount of payments to related parties and their 35
associates included in item 1
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, such payments
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Payments included in item 6.1 are related to fees and remuneration (inclusive of superannuation) paid to Directors.

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 and oil and gas exploration entity quarterly report

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7. Financing facilities Total facility Amount drawn at
Note: the term “facility’ includes all forms of financing amount at quarter quarter end
arrangements available to the entity.
end $A’000
Add notes as necessary for an understanding of the
$A’000
sources of finance available to the entity.
7.1 Loan facilities 450 450
7.2 Credit standby arrangements - -
7.3 Other - -
7.4 Total financing facilities 450 450
7.5 Unused financing facilities available at quarter end -
7.6 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.

Lender: Bath Resources Pty Ltd
Interest free
Unsecured
Maturity date – The Lender and the Company agreed to forbear the Loan for a period of 12 months
from the date the Company’s securities were reinstated to quotation on the ASX (4 June 2021). The
Lender and the Company agreed to negotiate in good faith the terms of the repayment of the Loan
during the 12 month period following reinstatement (until 4 June 2022).
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8. Estimated cash available for future operating activities $A’000
8.1 Net cash from / (used in) operating activities (Item 1.9) (437)
8.2 (Payments for exploration & evaluation classified as investing -
activities) (item 2.1(d))
8.3 Total relevant outgoings (Item 8.1 + Item 8.2) (437)
8.4 Cash and cash equivalents at quarter end (Item 4.6) 2,034
8.5 Unused finance facilities available at quarter end (Item 7.5) -
8.6 Total available funding (Item 8.4 + Item 8.5) 2,034
8.7 Estimated quarters of funding available (Item 8.6 divided by 4.65
Item 8.3)
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.
8.8 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?
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?
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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 and oil and gas exploration entity quarterly report

N/A

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?

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: 30 July 2021

Authorised by: ”By the Board”

(Name of body or officer authorising release – see note 4)

Notes

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.
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.
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.
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”.
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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AI assistant

REACH RESOURCES LIMITED Interim / Quarterly Report 2021

65731_rns_2021-07-29_79077ef4-a59a-41ee-8b67-5cc9fa806974.pdf

JUNE 2021 QUARTERLY ACTIVITY REPORT

SUMMARY

Reinstatement to Official Quotation

Definition drilling kicks off at Primrose Gold Project

PRIMROSE GOLD PROJECT

Blue Heaven

Primrose Shear Conceptual Gold Target

Exploration Drilling

CORPORATE

MATERIAL EVENTS SUBSEQUENT TO THE END OF QUARTER

GUIDENCE NOTE 23 DISCLOSURES

Details of mining exploration activities

Details of mining production and development activities

Details of tenement activities

Details of related party payments

This report has been authorised for release to ASX by the Chairman.

About Cervantes Corporation Limited

About the Primrose Project

Competent Person’s Statement

No New Information

Forward Looking Statement

SCHEDULE OF TENEMENTS As at 30 June 2021

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

N/A

Compliance statement

Notes

AI assistant

REACH RESOURCES LIMITED — Interim / Quarterly Report 2021

65731_rns_2021-07-29_79077ef4-a59a-41ee-8b67-5cc9fa806974.pdf

JUNE 2021 QUARTERLY ACTIVITY REPORT

SUMMARY

Reinstatement to Official Quotation

Definition drilling kicks off at Primrose Gold Project

PRIMROSE GOLD PROJECT

Blue Heaven

Primrose Shear Conceptual Gold Target

Exploration Drilling

CORPORATE

MATERIAL EVENTS SUBSEQUENT TO THE END OF QUARTER

GUIDENCE NOTE 23 DISCLOSURES

Details of mining exploration activities

Details of mining production and development activities

Details of tenement activities

Details of related party payments

This report has been authorised for release to ASX by the Chairman.

About Cervantes Corporation Limited

About the Primrose Project

Competent Person’s Statement

No New Information

Forward Looking Statement

SCHEDULE OF TENEMENTS As at 30 June 2021

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

N/A

Compliance statement

Notes

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REACH RESOURCES LIMITED Interim / Quarterly Report 2021