CZR Resources : set for key Reserve update

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CZR Resources Ltd

ABN: 91 112 866 869

Level 3, 47 Havelock St

West Perth Western Australia 6005

PO Box 16

Perth WA 6872

Phone: [phone]

Website: www.czrresources.com

The Company Announcements Office, ASX Limited

16 December 2021

CZR set for key Reserve update as part of

growth strategy for Robe Mesa iron ore deposit

Activities focused on increasing inventory, mine life and forecast production rate

CZR Resources Limited (ASX: CZR) is pleased to announce the completion of infill drilling at its flagship Robe Mesa iron ore deposit in WA's Pilbara, paving the way for a Reserve update.

The updated Reserve estimate will help underpin the Definitive Feasibility Study (DFS), which will examine the potential to increase the project's forecast production rate to 3Mtpa compared with the 2Mtpa modelled in the Pre-feasibility Study (PFS) (see ASX release dated December 10, 2021).

The infill drilling has reduced the drill spacing to approximately 50m x 50m, which will increase the available assay data, improve the confidence levels and expand the current Pre-feasibility Study pit designs.

CZR's 85%-owned Robe Mesa deposit sits within the Robe Valley Channel Iron Deposits (Robe Valley CID). The Robe River JV (Rio Tinto 53%, Mitsui 33%, Nippon Steel 14%) has been mining Robe Valley CID since the 1970s and has current mining operations at Mesa A, Warramboo and Mesa J, with rail linking to export facilities at Cape Lambert.

Fig 1. CZR's Yarraloola project and Robe Mesa deposit showing local infrastructure and iron ore deposits. Insert map showing regional infrastructure of the West Pilbara, relative to the Robe Mesa deposit

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The Robe Mesa iron ore deposit has JORC compliant Ore Reserves of 8.2Mt at 56% Fe (62.7% Fe calcined) derived from a Mineral Resource base of 24.7Mt at 56% Fe (55% Fe cut-off grade). The JORC Resource increases significantly to 89.1Mt at 53.7% Fe (60.1% Fe calcined) at a lower 50% Fe cut-off grade.

CZR has now completed an additional 164 RC holes for 7,803m within the existing JORC Resource envelope, targeting the upper and lower pisolite units of the Robe Valley CID. The drilling was designed to reduce the drill-grid spacing from approximately 100m to 50m, providing more data to comprehensively establish a grade distribution model to enable CZR to assess larger, more consistent pit designs to increase mine life and production rates. The results will also provide valuable data for CZR to assess additional iron ore products and/or adjust cut-off grades to increase mining inventory.

All samples have now been transported to Perth, with assays expected in 8-10 weeks. CZR is currently updating the geological model and anticipates an updated JORC Resource and Reserve report in the June quarter, 2022.

CZR Managing Director Stefan Murphy said completion of infill drilling marked an important milestone in the growth of the project.

"This is a key part of our strategy to grow Robe Mesa by expanding the current pit designs and accessing the lower pisolite." Mr Murphy said.

"Once assay results are received early in the new year, we will focus on optimising our pit designs and iron ore product mix, which will in turn feed into the DFS.

"At the same time, our environmental studies remain on track for the DFS and we continue to work closely with our Native Title partners on cultural heritage and a sustainable development for the Robe Mesa deposit."

Fig 2. Location of all RC drill-holes on the Robe Mesa, including 2021 infill drilling

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The Robe Mesa PFS demonstrated a robust development plan with strong financial returns. However, CZR believes there is significant scope to further improve the project economics, hence its recent focus on expanding the PFS pit designs to extend the mine life and increase production rates from 2Mtpa to a more optimal 3Mtpa.

A key recommendation of the PFS was to close the drill spacing from 100m x 100m into 50m x 50m in order to improve confidence in grade distribution through the resource model and enable larger, more coherent pit designs. In addition to increasing the size of the pits, the larger mining footprint will enable the new pit designs to extend deeper into the lower pisolite of the Robe Valley CID, which was previously excluded from the PFS. The Lower Pisolite is approximately 10m thick and is separated from the Upper Pisolite by 10-15m of waste. The Lower Pisolite is similar in grade to the Upper Pisolite and provides the best opportunity to rapidly increase the mining inventory of the Robe Mesa iron ore deposit.

Fig 3. Cross section of the geology and mineralisation through the Robe Mesa deposit (refer Fig. 2 for location)

CZR is also assessing a secondary product to supplement the primary Robe Mesa iron ore fines product. The PFS assessed a single iron ore fines product, utilising a 55% Fe cut-off grade to generate a high-quality specification of 56% Fe (62.7% Fe calcined), 5.9% SiO2, 2.7% Al2O3 and 0.04% P ("Robe Mesa Fines"). The quantity and quality of a lower grade product (~53-54% Fe, 10-12% SiO2+Al2O3 and low P), will be assessed during the upcoming phase of Resource and Reserve work, along with assessing different cut-off grades to increase iron ore inventory.

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Next Steps

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The Robe Mesa DFS is progressing, with delivery expected in Q3 2022:

• Diamond drilling for metallurgical test work is set for late Q1 2022. An expanded metallurgical test work program has been developed to include ore from the Lower Pisolite (previously excluded) and samples of lower grade iron ore in addition to the standard Robe Mesa Fines product. The metallurgical test work will cover:

1. Comminution (including bulk density analysis)

1. Ore and waste rock characterisation, including Mineralogy

1. Transportable and Dust extinction moisture levels

• 1. Preparation of bulk samples for customer analysis
• Updated JORC Resource and Reserve report with revised mine plan and schedule expected in Q2 2022
• Heritage clearance survey to upgrade site access and develop a bore field for camp and processing water is scheduled for Q1 2022. Further Heritage clearance surveys will be required once pit designs are finalised mid-2022.
• Negotiations continue with Robe River Kuruma (RRKAC) Native Title representative body for the approval of the mining operation and the compensation agreement which will be required for grant of the mining lease.
• Final field-based programmes are to be completed for flora, fauna and troglofaunal studies over the proposed mine-site area as part of the base-line environmental surveys that are required for the future approval of mining
• 1. All mining is above the water table and will not impact stygofauna. However, stygofauna studies will be completed for bore field locations.
• Updated hydrological study and impacts on the proposed mine and associated infrastructure layouts has been completed but will be updated following completion of updated pit designs, ore processing rates and plant layout.
• Continuing discussions with Onslow Marine Support Base (Beadon Creek, Onslow) and Pilbara Port Authority (Port of Ashburton, Onslow and Utah Point, Port Hedland) around operational constraints and opportunities to establish an export facility with capacity of up to 3Mtpa.
• Opportunities to grow the mining inventory through regional consolidation and brownfields exploration continue to be assessed

This announcement is authorised for release to the market by the Board of Directors of CZR Resources Limited.

Stefan Murphy	Media
Managing Director	Paul Armstrong
CZR Resources Ltd	Read Corporate
[phone]	[phone]

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Forward Looking Statements

This announcement contains "forward-looking information" that is based on CZR's expectations, estimates and projections as of the date on which the statements were made. This forward-looking information includes, among other things, statements with respect to the pre-feasibility study, CZR's business strategy, plan, development, objectives, performance, outlook, growth, cashflow, projections, targets and expectations, mineral resources, ore reserves, results of exploration and related expenses. Generally, this forward looking information can be identified by the use of forward-looking terminology such as 'outlook', 'anticipate', 'project', 'target', 'likely', 'believe', 'estimate', 'expect', 'intend', 'may', 'would', 'could', 'should', 'scheduled', 'will', 'plan', 'forecast', 'evolve' and similar expressions. Persons reading this announcement are cautioned that such statements are only predictions, and that CZR's actual future results or performance may be materially different. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause CZR's actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information.

Forward-looking information is developed based on assumptions about such risks, uncertainties and other factors set out herein, including but not limited to general business, economic, competitive, political and social uncertainties; the actual results of current exploration activities; conclusions of economic evaluations and studies; changes in project parameters as plans continue to be refined; future prices and demand of iron and other metals; possible variations of ore grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accident, labour disputes and other risks of the mining industry; and delays in obtaining governmental approvals or financing or in the completion of development or construction activities. This list and any further risk factors detailed in the remainder of this announcement are not exhaustive of the factors that may affect or impact forward-looking information. These and other factors should be considered carefully, and readers should not place undue reliance on such forward- looking information. CZR disclaims any intent or obligations to revise any forward-looking statements whether as a result of new information, estimates, or options, future events or results or otherwise, unless required to do so by law.

Statements regarding plans with respect to CZR's mineral properties may contain forward-looking statements in relation to future matters that can only be made where CZR has a reasonable basis for making those statements. Competent Person Statements regarding plans with respect to CZR's mineral properties are forward looking statements. There can be no assurance that CZR's plans for development of its mineral properties will proceed as expected. There can be no assurance that CZR will be able to confirm the presence of mineral deposits, that any mineralisation will prove to be economic or that a mine will successfully be developed on any of CZR's mineral properties.

CZR believes it has a reasonable basis for making the forward looking statements in this announcement, including with respect to any production targets and economic evaluation, based on the information contained in CZR's ASX announcement entitled "Pre-Feasibility Study finds Robe Mesa iron ore project is technically robust with potential to generate strong financial returns" dated 10 December 2020. CZR confirms that it is not aware of any new information or data that materially affects the production targets contained in the previous announcement of the prefeasibility study and all material assumptions underpinning the production targets and economic valuation in the previous market announcement continue to apply and have not materially changed.

CZR Resources Ltd

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