Alara Resources : Project Construction and Schedule Update

Alara Resources Limited	Telephone |	[phone]
A.B.N. 27 122 892 719	Facsimile	|	[phone]
Suite 1.02, 110 Erindale Road,	Web	|	www.alararesources.com
Balcatta WA 6021, Australia	Email	|	[e-mail]

PO Box 963, Balcatta WA 6914

For personal use only

ASX/MEDIA RELEASE

6 June 2022

AL WASH-HICOPPER PROJECT CONSTRUCTION ACTIVITY

EQUIPMENT DELIVERY AND SCHEDULE UPDATE

Key Highlights

• Project completion date revised.
• Bulk earth works associated with initial plant and infrastructure construction activities at the Al Wash-hi Majaza Copper-Gold Project (the Project) well underway.
• Key Project equipment deliveries arriving.
• Prefabricated steel for mining workshop and washing bay structure, delivered in April, being erected.
• Al Wash-hi pit pre-stripping activities progressing well.

Perth, Australia: Alara Resources Limited (ASX: AUQ) (Alara or the Company), a base and precious metals explorer and developer with projects in Oman, is pleased to provide an update on its project development activities at the Al Wash-hi Majaza Copper-Gold (Project) in that country. Alara owns a 51% equity interest in the Al Hadeetha Resources LLC (AHRL) joint venture which is developing the Project.

AHRL has continued to progress Project development on multiple fronts, with these activities to ramp up in June.

Project completion schedule reviewed and revised

In light of logistical challenges associated with the Ukraine war, constrained shipping availability and delayed project engineering a project schedule review (Schedule Review) was conducted by the AHRL Project Management Consultant.

The review determined that previously reported project completion in November 2022 is no longer achievable. The revised completion date determined by the Schedule Review is 25 April 2023, with mechanical completion of plant to occur by 25 February 2023. Key factors impacting the previously reported project timeline are stated below:

• An update to the estimated times of arrival of 19 equipment packages, now due between September and December 2022.
• The Construction contractor revising the start date for concrete works for grinding and classification area from 30 May to 30 June 2022.
• The construction activity sequence contains overlapping activities between various disciplines and contractors, representing a schedule risk due to potential clashes and safety issues in co-ordinating changeovers.
• A recent, further, deterioration in the shipping market due to a new Covid lockdown and the Ukraine war, causing low availability of containers and sea transport from all world ports.

• Ukraine war impacting availability and prices of key project components, prolonging order placement negotiations.

ASX Code | AUQ

The revised critical path of Project completion is shown in the figure below.

For personal use only

Revised Apr-23 Project Completion Scenario

Several remedial measures are being actioned to bring the Project schedule back toward the previously forecast completion date:

• Increased resources to Project engineering and procurement departments.
• Enhanced project management responsibility with increased personnel assigned to site supervision and coordination.
• More regular item-wise tracking of procurement items.

Bulk earth works well underway

The bulk earth works (BEW) central to the Project's initial plant and infrastructure construction activities are well underway and tracking to schedule. These works have three components:

• Crusher and stockpile area
• Processing plant area
• Water reservoir.

In addition to these BEW activities, run-of-mine (ROM) pad levelling and associated padding work has also commenced and are almost complete. AHRL undertakes regular aerial surveys of the mining license area. Some images from these surveys are included below, showing progress made in the abovementioned areas.

ROM and Stockpile earthworks

ASX Code | AUQ

The following three images highlight the progress being made from a BEW perspective.

For personal use only

Aerial Photo of plant area showing BEW

3D view of excavation activities at the plant area

ASX Code | AUQ

For personal use only

Excavation activities at the ROM Pad area

Plant and equipment procurement

Plant and equipment has begun arriving at the Project site. Equipment which has arrived or is expected to reach at the Project site by July end 2022 includes:

• Mining workshop material from Kirby UAE (delivered)
• Regrinding Mill Liner Arrangement from Metso Outotec (delivered)
• Magnetic separator from Electrozavod, India (delivered)
• ABB Electrical packages, first lot of 10 containers (delivered)
• Flotation cells from Innovator, Poland (on vessel)
• Filters from Matec (on vessel)
• Semi-autogenousgrinding (SAG) and ball mill from CITIC China (ETA July)
• Crusher from CITIC China (ETA July)

[The remainder of this page is intentionally blank]

ASX Code | AUQ

The following images show equipment at CITIC China ready for shipping.

For personal use only

Ball mill 1 head

Ball mill shell body 1

SAG Mill trunnion 1

Prefabricated steel for the mining workshop and washing bay has arrived and construction of those facilities has commenced.

Mining workshop steel delivered ready for construction 1

ASX Code | AUQ