Pre-feasibility Study - Caravel Copper Project

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ASX:CVV

12 July 2022

CARAVEL COPPER PROJECT PRE-FEASIBILITY STUDY HIGHLIGHTS ROBUST, EXECUTABLE PROJECT AND REPORTS MAIDEN ORE RESERVE

Highlights

• Caravel Copper Project PFS demonstrates a robust, executable project generating strong cash flows over an initial 28-year mine life
• Annual production of ~62,000 tonnes of copper in very clean concentrate
• Low operating costs (C1 ~US$1.72/lb) due to very low strip ratio of 1.3:1 (including pre-strip), good metallurgy, low-cost electricity and scale
• Use of automation and electrification maximises safety and efficiency while significantly lowering diesel consumption and carbon emissions
• PFS design is based on parallel development of two 13.9Mtpa capacity trains for a total throughput capacity of 27.8Mtpa
• Initial capex expenditure for a 'Dual Train' plant and infrastructure is $1.2B
• Initial mining plant and equipment is estimated to cost $309M, which is expected to be financed by arrangement with vendors
• Initial mining pre-strip at Bindi is estimated at $189M
• Financial modelling shows a pre-tax NPV (7%) $1.1B with an IRR of 14.7%
• Optimisation studies by Ausenco are in progress for a Single Train ~27Mtpa design. Results are due next month and are expected to show substantial reductions in capex and operating costs
• Caravel Copper Project Maiden Ore Reserve (JORC 2012) of 583.4Mt at 0.24% copper for 1.42Mt contained copper (at 0.10% cut-off) confirms:

1. Proven Ore Reserves of 105.4Mt for 0.28Mt contained copper o Probable Ore Reserves of 478.0Mt for 1.14Mt contained copper o 81.6% of the Project's 28-year mine life is in Ore Reserve

• 1. The amount of inferred material with the first 20 years of mining equates on average to 2% of the ore tonnes mined
• The Ore Reserve statement is based on mining studies completed for the PFS and confirms the project as one of Australia's largest undeveloped copper deposits
• The PFS is based only on the Bindi and Dasher deposits, comprising ~6km of a 30km mineralised system, with significant upside for resource growth

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Caravel Minerals Limited (the "Company") (ASX: CVV) is pleased to announce results of the Pre- Feasibility Study ("PFS") and a Maiden Ore Reserve for its 100%-owned Caravel Copper Project in the Wheatbelt region of Western Australia. The Caravel Copper Project Pre-Feasibility Study report is provided as Appendix 1.

Key Results

Detailed technical, environmental, and commercial studies completed as part of the PFS indicate Caravel can be built and operated with low operating costs (C1 costs of US$1.72/lb, All-in Sustaining Cost of US$2.55/lb), low technical risks, minimal environmental impact and positive economic and social outcomes.

The base case financial model assumes a long-term price of US$4.00/lb Cu and exchange rate of US$0.72:A$1.00. Over the current 28-year project mine life, modelling demonstrates that the Project will produce ~62,000 tonnes per annum of copper in concentrate, generating cumulative pre-tax net cashflows of $4.62B on total copper sales revenues of $17.55B.

Initial capital required to construct the dual train process plant, site infrastructure, tailings storage, borefield and owners' costs is estimated to be $1.2B. Initial costs for mining equipment to achieve full production are estimated at $309M, which is expected to be arranged under vendor financing. A further $189M has been allowed for pre-stripping overburden at Bindi over the same time period.

Utilising a 7% real discount rate, the Project generates a pre-tax, project level, Net Present Value (NPV) of $1.1B and pre-tax IRR of around 15%. The Project is forecast to repay up-front development capital within seven years from the start of production.

Life Of Mine Financial Economics (A$)

Summary of assumptions:

• Exchange rates: An exchange rate of 0.72 US$ per A$ was used to convert the US$ market price projections into Australian currency.
• Discount rate - Caravel Minerals considers 7% to be an appropriate discount rate based upon the Australian risk-free interest rate, low risk profile of Western Australia as reported by Fraser Institute and the Project's proximity to major infrastructure.
• All costs and sales are presented in constant Q2 2022 A$, with no inflation or escalation factors considered.
• All related payments and disbursements incurred prior to commencement of construction are considered as sunk costs.

The PFS reports on a single stage development of two identical processing trains each of 13.9Mtpa, delivering a total capacity of 27.8Mtpa. This Dual Train design was originally adopted to allow a staged development, however recent studies have demonstrated it is more attractive for the project to commence at the higher throughput without staging.

Optimisation studies for the development of a Single Train design with ~27Mtpa capacity commenced in June and are due to be finalised next month. These studies are expected to show potential for significant reductions in capital and lower operating costs, with substantial benefits to the financial metrics of the project. A number of other opportunities are also being studied to increase plant throughput and further reduce capital and operating costs.

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Maiden Ore Reserve

A Maiden Ore Reserve has been declared for the Caravel Deposits on which the PFS is based. Orelogy Consulting Pty Ltd has prepared the Ore Reserve Statement in conjunction with mining studies undertaken as part of the Caravel Copper Project Pre-Feasibility Study. The competent person for the reserve estimate is Mr Stephen Craig, Orelogy Chief Executive Officer. Mr Craig is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Craig has sufficient experience relevant to the style of mineralisation, the type of deposit and the activities planned at Caravel to qualify as a Competent Person as defined in the 2012 JORC Code.

Mine planning also utilised inputs from technical specialists including:

• Mineral Resource modelling and estimation - Trepanier
• Geotechnical studies and slope design criteria - Dempers and Seymour
• Modifying factors associated with dilution and mining recovery estimates - Orelogy
• Processing costs, processing recoveries and concentrate grade - Aurifex
• ACE reviews - Minera and Idoba (experts in the application of autonomy)
• Metal prices, royalties and concentrate payability - Caravel Minerals

Ore Reserve Statement

Caravel Copper Project Maiden Ore Reserve (JORC 2012) statement includes:

• Proven and Probable Ore Reserve of 583.4Mt at 0.24% Cu for 1.42Mt contained Cu
• Proven Ore Reserves of 105.4Mt for 0.28Mt contained copper
• Probable Ore Reserves of 478.0Mt for 1.14Mt contained copper
• Average strip ratio of 1.3:1 (including all pre-strip)
• 82% of the Project's 28-year mine life is in Ore Reserve
• Estimation methodology is based on an owner mining scenario with costs and productivities developed from first principles and Q1 2022 capital and operating costs.

The Ore Reserve is detailed report in Table 1 below and in Appendix 2.

Table 1: Caravel Copper Project Ore Reserve Summary

Note: Appropriate rounding applied

The Ore Reserve for the Project is reported according to the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, JORC Code 2012.

Figure 2: Bindi Deposit. Grade distribution within Starter pits and Ore Reserve pit showing higher grades in the early mining schedule and extensions at depth.

Plant throughput parameters for the Ore Reserve are based on a 27.8Mtpa copper processing facility at 92% recovery and minimal to no deleterious elements impacting plant performance. The mine plan

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supporting the Ore Reserve is based on an open-pit mine using diesel-electric autonomous haulage trucks with electric trolley assist and electric power for drills and face-shovels. The mine planning study involved mine cost estimation, pit optimisation (see Figure 3), mine design and scheduling. The overall ore loss and dilution are low due to the strategy for bulk mining at lower grades, which reduces mining risk for unplanned dilution. Dilution for Bindi and Dasher are 2.7% and 1.6%, and ore loss 0.2% and 2.7% respectively

Figure 3: Final pit design at Bindi closely matches the WhittleTM optimisation used to evaluate the financial viability and optimal mining strategy for the deposit

Proven Ore Reserves are based on the Project's Measured Resources and Probable Ore Reserves are based on Indicated Resources reported within the pit design. The cut-off grade was derived as part of the mine optimisation factoring in processing costs, the copper recovery factor and the net copper price after considering the associated selling costs.

The result was a cut-off grade of 0.1% Cu on which the Probable and Proven Reserves are based. Mining at Bindi will be sequenced and developed in five stages with a similar approach at Dasher which is to be developed in three stages. This allows ore feed to the mill of >0.28% Cu for the first five years of the project. The schedule also balances the amount of waste stripping in the early years with maintaining both a continuous supply of ore at the desired rates and an acceptable vertical rate of advance for each stage.

There are additional Inferred and unclassified resources below the Bindi and Dasher pits with significant Inferred Resources at Bindi West below the current Ore Reserve. Included within the pit design inventory but not the Ore Reserve is 131.5 Mt of inferred material at 0.249% Cu. Given the strong geological continuity in ore zones above there is good potential for converting these Inferred Resources into higher classifications through further drilling. It should be noted that inferred mineral resources have a lower level of geological confidence and there is no certainty that further exploration work will result in the determination of indicated mineral resources.

The Caravel Copper deposit is situated within the mining lease applications MLA70/1410 and MLA70/1411.There are no mining activities planned outside the lease boundaries and Orelogy understands there are no social or environmental exclusions zones within the lease area that affect the mining operation.