Errawarra Resources: – Half-year financial report

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DIRECTORS’ REPORT

The directors of Errawarra Resources Ltd (Errawarra, Group Where Company) submit the financial report for the half-year ended

December 31, 2021. In order to comply with the provisions of the Companies Act 2001the Directors report as follows: The names of the Directors of the Company in office during and since the end of the half-year are:

Non-Executive Chairman

Executive Director

Non-executive directors

Mr Jonathan Murray

Mr Thomas Reddicliffe

Mrs. Greta Purich

The directors exercised their functions throughout the half-yearly period and up to the date of this report, unless otherwise stated.

Main activities

The main activity of the Group during the semester was the exploration and evaluation of mineral interests.

Results

The Group’s consolidated net loss for the six months after income tax expense was $713,762 (December 2020: loss of $2,020,584).

Operations report

West Andover | Nickel-Copper (80% interest)

On November 23, 2021, Errawarra announced that it had entered into a binding agreement to acquire an 80% stake in Western Exploration Pty Ltd, owner of E47/4352, which includes the Andover West Nickel-Copper project. Western Exploration Pty Ltd owns all mining rights except Iron Ore. Approval of this acquisition will be sought from shareholders at a general meeting (GM), the date of which must be communicated upon receipt of the independent experts’ report.

The Andover West Project is located in the northwest part of the Pilbara Craton and covers granitic greenstone terrane lithologies hosted in the West Pilbara Super Terrane. Of economic interest is the Andover Intrusive Complex of the Orpheus Supersuite which hosts nickel sulphide mineralization (announcement by Azure Minerals Ltd ASX October 12, 2020) and also outcrops in the northwest corner of the Tenement .

There are 11 untested discrete EM conductive targets identified from historical work in the building that warrant testing with 4 considered high priority. The highest priority EM (electromagnetic) target is located along the southern margin of the Andover Intrusive Complex, in the northwest corner of the Andover West Concession, and approximately 2.8 km southwest of Azure Minerals Ltd’s nickel sulphide discovery “VC 07” which is in a similar position along the edge of the intrusion contact. Two associated VTEM targets have also been identified within the Andover Intrusive Complex to the north and south of the high priority EM target area and may be related to the primary priority target.

There has been a technical reassessment of the prospectivity of these EM targets in light of Azure’s recent success through the building boundary. The Company considers that these EM anomalies have not been properly explained and represent valid untested targets requiring detailed follow-up exploration, modeling and drill testing.

A heritage agreement with the Ngarluma Land Council is nearing finalization, after which the building is expected to progress to concession.

Binti Binti | Gold (80% interest)

Errawarra holds interests in three properties in the Edjudina region of Western Australia. The Binti Binti gold project is located 70 km northeast of Kalgoorlie. Errawarra is targeting an orogenic gold deposit in a structural setting similar to King of the Hills (formerly Tarmoola).

Two reconnaissance core drilling programs comprising 10,027m for 261 holes were completed on the project concessions in 2021. The first drill program took place in the E27/603 concession and targeted an interpreted pressure shadow at a greenstone-granite contact coinciding with a gold anomaly in the ground. . Drilling established that the ground anomaly was confined to the regoilth. The second drilling program focused on the adjacent E27/577 property hosting exploration pits and old workings. Two adjacent drill holes intersected steeply dipping high grade ([email protected]/t) quartz veins beneath a prospecting pit (grab samples returned 227g/t and 1.2 g/t Au in two separate samples). These results indicate that the gold is bound to a bedrock gold system (rather than surface enhancement) and may persist at depth.

In E27/577, historic gold workings are spatially associated with the western flank of an anticlinal structure. This spatial association provided a potential targeting pattern for the prospect and, as a result, the company was granted application E31/1298 to the north and adjacent to the concession properties.

Fraser Range | Nickel-Copper (70% interest)

The Fraser Range project located approximately 30 km southwest of the operating Nova nickel-copper-cobalt mine owned by IGO Ltd is considered prospective for Nova-style Ni-Cu-Co magmatic sulphide mineralization.

Initial exploration focused on testing priority areas with moving loop electromagnetic (MLEM) surveys based on gravity anomalies, magnetic anomalies, geochemical anomalies and geological units favorable for sulphide mineralization.

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