Caspin Resources : Advancing on Multiple Fronts at Yarabrook Hill

ASX RELEASE

24 January 2022

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Caspin Advancing on Multiple Fronts at Yarabrook Hill

HIGHLIGHTS

• Large-scalePGE-Ni-Cu mineralisation trends emerging at the Central Yarabrook Hill Prospect

1. Continuity of mineralised ultramafic now demonstrated over 1,500m down-dip and 3,000m of strike extent

• o Multiple target concepts to be evaluated

• Further nickel-copper sulphides intersected at XC-22, now emerging as a separate prospect; mineralisation remains open
• Assay results from Phase 2, 16-hole drilling program still pending
• Drilling to recommence in February 2022 with several Phase 2 holes to be extended with
  'diamond tails' in addition to drilling new, previously untested targets
• Airborne Electromagnetic survey now providing complete project-wide coverage

Caspin Resources Limited (ASX: CPN) ("Caspin" or "the Company") is pleased to provide an update on exploration activities and drill results from Yarabrook Hill Prospect at the Company's Yarawindah Brook PGE- Ni-Cu Project in Western Australia.

Phase 1 of an RC program was completed in August-September 2021, the assay results of which have now been received in full. These results have been integrated into an updated geological model which is also based on pre-existing data and visual results from more recent drilling, which includes Phase 2 of the RC drilling program and two diamond drill holes. All drilling has been focused on the Yarabrook Hill intrusion, which is only a small area within the overall Yarawindah Brook project area.

Recent Drilling at the Yarabrook Hill Intrusion

Phase 1 of the RC program consisted of 11 holes for approximately 3,000m of drilling as a first pass test of the Yarabrook Hill intrusion, with the aim being to provide early insight into the architecture of the intrusion and assist any subsequent programs in vectoring towards its most prospective parts.

Due to difficult ground conditions, the 11 holes were prioritised on ease of access within the prospect area and did not necessarily test the highest-ranking targets (e.g., the main part of the Eastern geochemical soil anomaly). The program was suspended in September to allow for surface ground conditions to improve resulting in Phase 2 of the RC program being completed from October to December.

Phase 2 consisted of a further 16 RC holes (~2,500m) and two diamond drill holes (YARCD0012, YAD0019; ~1,500m). The RC program mostly tested targets at the Eastern geochemical soil anomaly (5 holes, YARC0017 - YARC0021) and XC-22 airborne electromagnetic anomaly (6 holes; YARC0024 - YARC0027). Three holes (YARC0013-YARC0015) tested a magnetic feature to the south of Yarabrook Hill but only intersected barren lower sequences of the intrusion. YAD0019 was an EIS-funded deep diamond drill hole designed to drill through as much of the intrusion as possible to help development of the geological model. Unfortunately, due to excessive ground water, many of the RC holes in Phase 2 have failed to reach target depth and will be extended with diamond tails on the recommencement of drilling.

Results from the Phase 1 drilling have returned broad zones of mineralisation. Note that these intersections contain some internal dilution from rocks such as late-stage, barren dolerites. The previously reported result from YARC0001 of 263m @ 0.24g/t Pd+Pt+Au (3E), 0.11%Ni & 0.13% Cu is the standout intersection, but further broad zones were returned in YARC0009, including 116m @ 0.11g/t 3E, 0.15% Ni & 0.11% Cu, hosted within peridotite and pyroxenite rocks. YARC0009 was drilled 135m up dip of YAD0017 which previously intersected multiple zones of PGE-Ni-Cu sulphide mineralisation (See ASX announcement of 5 July 2021).

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See Table 1 for full details of significant assays.

Based on a review of the results received to date, it is now thought that the XC22 Prospect, while still hosted within the large Yarabrook Hill intrusion, may be a separate mineralised position to the main Yarabrook Hill mineralised zone which has been the focus of most exploration to date.

Central Yarabrook Hill Intrusion

The combined results from Phase 1, and visual observations from Phase 2 RC and diamond holes have given the Company a greater understanding of intrusion architecture and controls on mineralisation, therefore helping the targeting of potentially economically- mineralised positions.

These new results are broadly consistent with the geological model for the Yarabrook Hill intrusion that has been previously reported. The key elements of this model are that the intrusion (or at least its eastern section) is interpreted to dip moderately to the NE and has been overturned, with a thick section of mineralisation-hosting ultramafic rocks (peridotite and pyroxenite) present immediately below the hanging-wall contact. The hanging-wall contact is interpreted to be a structural contact, where intersected to date, with significant later granitoid intrusions emplaced above and along it.

Figure 1. Sulphide mineralisation at 320m downhole in YARCD0012

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The footwall of the mineralised section is defined by an interpreted fault, referred to as the Radio Tower thrust. Below this structure, the intrusion is barren and more fractionated, consistent with an originally higher stratigraphic position. It is not known whether the intrusion remains downward facing below this structure. Drill holes YARC0004 - YARC0008 & YARC0010 are now recognised to have intersected this structurally lower, but stratigraphically upper, barren section of the intrusion, below the Radio Tower thrust, and therefore would not be expected to be significantly mineralised.

Given the context of this geological model, the Company has defined three significant target concepts at the main Yarabrook Hill prospect. Each of these is discussed below.

1. Higher-GradeSegments within the extensive Main Mineralised Zone

1. localised segment within the thick (typically 100-200m), extensive and continuous sulphide-mineralised zone with higher sulphide content and/or mineralisation tenor. Based on analogies with similar systems elsewhere (most notably the high-grade FlatReef deposit within the PlatReef zone of the Bushveld complex in South Africa), we expect that such significant changes may occur with variations in the geometry of this

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mineralised zone. In particular, we expect that segments that were originally in a flatter orientation to be more strongly mineralised.

There is a large potential search-space at Yarabrook Hill for the discovery of such a position, as the main mineralised zone has been traced over 3,000m of strike and has now been intersected over 1,500m of down- dip extent. To date there are only a small number of holes that have both intersected the entire width of the mineralised zone and have assays for both PGE and base-metals (see Figure 2) and therefore there is currently insufficient data to vector towards this target position. There are large areas with no effective drilling at all.

However, it is encouraging that the mineralisation section appears to be thickening down-dip, based on observations from YAD0019 which reported a sulphide zone in mixed peridotite and pyroxenite over a thickness of at least 200m (See ASX release of 26 November 2021).

Figure 2. Interpreted geology of Yarabrook Hill with effective drilling and total metal accumulations combining Caspin drilling (labelled) with historical drilling. Some historical drilling requires further geological interpretation to confirm sulphide intersections, particularly at the summit of Yarabrook Hill. The figure provides some evidence that mineralisation is increasing down-dip, although large areas are yet to be effectively drill tested, including areas where Caspin is yet to complete drill holes or receive assay results.

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2. Narrower, higher-gradezones within the broader Main Mineralised Zone

Within the broad zone of mineralisation at Yarabrook Hill, a number of narrower, higher-grade zones have been intersected. For example, new results from YARC0009 included intersections such as 2m @ 0.58g/t 3E, 0.37% Ni & 0.57% Cu and 3m @ 0.85g/t 3E, 0.16% Ni & 0.09% Cu. Previous examples of narrower, higher-grade intersections include 4.4m @ 0.88 g/t 3E, 0.43% Ni & 1.00% Cu, in YAD0017. If continuity of these zones can be demonstrated with closer spaced drilling in future drill programs, they may possibly represent an economic exploration target.

3. Primary Basal Contact Massive-Sulphidemineralisation below the HW contact Shear Zone

In all holes drilled to date, the hanging-wall of the mineralised zone has been a structural contact with peridotite and a primary igneous basal contact position has not been observed. This is important because such basal contact positions within mineralised intrusions are commonly where massive sulphide mineralisation occurs. Therefore, any positions where a primary contact may be preserved below the Hanging Wall Shear zone are a very important conceptual target for the company. Deep penetrating ground-EM surveying is likely to be the best method to help target such a position. Previous EM surveys did not cover the down dip extent of the intrusion to the NE. This target concept may also be relevant to the XC-22 Prospect.

Of note from the first phase of RC drilling is hole YARC0011, which is the largest step-out in the down-dip position to date, approximately 1,500m from the mineralised outcrop at the summit of Yarabrook Hill. This hole passed through a large thickness of granite before terminating in the upper part of the mineralised sequence of peridotite and pyroxenite. This hole also returned the highest-grade mineralisation from the first phase of 3m

• 1.32g/t 3E, 0.06% Ni & 0.82% Cu from 340m. This intersection appears to be a secondary vein system, that was remobilised from a nearby primary source. It is very encouraging to obtain such an intersection so far down- dip from the original discovery of outcropping mineralisation. Therefore, this hole will be extended with a diamond tail to test the full mineralised sequence of peridotite-pyroxenite.

Figure 3. Section through Yarabrook Hill showing results and potential mineralised zones yet to be tested.

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XC-22 Prospect

The Company recently announced a new nickel-copper sulphide discovery at the XC-22 airborne electromagnetic (AEM) anomaly (See ASX announcement of 26 November 2021). A further four holes have been drilled at XC-22, with some further intersections of disseminated sulphide mineralisation. However, due to difficult drilling conditions, three additional holes (YARC0024, YARC0025 and YARC0027) were unable to reach their target depth and therefore the down-dip position from YARC0022 is yet to be tested. The geology of YARC0027 is particularly encouraging, intersecting a 38m zone of disseminated sulphides in a peridotite unit before the hole was abandoned. This peridotite unit is generally associated with stronger mineralisation at Yarabrook Hill.

Historical drilling in this area was shallow and assayed only for PGE's. Results from holes YBR060-YBR062 suggest some lateral supergene dispersion of PGE's in the weathered zone and a deeper sulphide intersection in YBR063. This could be a near-surface expression of sulphide mineralisation intersected in YARC0022 (Figure 4).

Drilling has defined a granite contact to the east of YARC0022 coincident with the margin of the AEM anomaly (Figure 5). It is possible the sulphide mineralisation plunges beneath this granite contact in an east-north easterly direction and if so, would not have been detected by the AEM survey. Further ground and down-hole EM surveying is planned to assist future targeting.

The failed holes will either be extended with diamond tails or re-drilled during the next campaign to fully test the mineralised peridotite-pyroxenite stratigraphy in this area.

Figure 4. Section through XC-22 showing YARC0022 and mineralisation in historical drilling.

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