Announcement PDF Auking Mining Limited ASX:AKN Suite 2208, Level 22 127 Creek Street Brisbane Queensland 4000 ABN 29 070 859 522 Phone 07 3535 1208 www.aukingmining.com 1 June 2023 ASX RELEASE Koongie Park copper mine development to progress after positive Scoping Study results AuKing Mining Limited (ASX: AKN) will progress its Koongie Park copper/zinc Project in Western Australia’s Hall’s Creek region to more advanced development studies after a Scoping Study completed this month confirmed the potential for a financially robust, globally competitive operation. The Study showed the mine would source mineralisation from four open pit mines and an underground mine for an estimated total production of 110kt Cu, 38kt Zn and 355koz Ag over an 11 year mine life. CAUTIONARY STATEMENTS The Scoping Study referred to in this announcement is a preliminary technical and economic study of the potential viability of developing the Koongie Park Copper/Zinc Project by establishing a mine at Sandiego and constructing a processing facility onsite. The proposed development includes the nearby Onedin deposit together with the Mt Angelo North and Bommie deposits owned by Cazaly Resources Ltd (ASX:CAZ). The Scoping Study referred to in this announcement is based on low-level technical and preliminary economic assessments and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or certainty that the conclusions of the Scoping Study will be realised. The Study is based on the material assumptions outlined below. These include assumptions about the availability of funding. While AKN considers all of the material assumptions to be based on reasonable grounds, there is no certainty that they will prove to be correct or the range of outcomes indicated by the Study will be achieved. To achieve the range of outcomes indicated in the Scoping Study, development funding in the order of A$135M will likely be required. Investors should note that there is no certainty that the Company will be able to raise that amount of funding when needed. It is also possible that such funding may only be available on terms that may be dilutive to or otherwise affect the value of AKN’s existing shares. 1 It is also possible that AKN could pursue other “value realization” strategies such as a sale, partial sale or joint venture of the project. If it does, this could materially reduce the Company’s proportionate ownership of the project. Given the uncertainties involved, investors should not make any investment decision based solely on the results of the Scoping Study. For the first 8 years of production (from the Sandiego, Mt Angelo North and Onedin deposits) 89%, 100% and 58% respectively is in the Indicated Mineral Resource category and the balance is in the Inferred Mineral Resource Category across the different deposits. The Company has therefore concluded it has reasonable grounds for disclosing a Production Target, given that the Scoping Study assumes that in the first 8 years of operation, an average of 86% of the production is from the Indicated Resource category. The inferred mineral resource is not considered to be a determining factor in determining the viability of the Koongie Park Project. There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of further Measured or Indicated Mineral Resources or that the Production Target or preliminary economic assessment will be realised. For full details of the Mineral Resource Estimates for the Sandiego and Onedin Resources, including JORC Table 1, please refer to AuKing ASX Release – on 7 April 2022. For full details of the Mineral Resource Estimates for the Mt Angelo North and Bommie Resources, including JORC Table 1, please refer to Cazaly ASX Releases on 31 January 2022 and 2 December 2022 respectively. AuKing confirms that it is not aware of any new information or data that materially affects the information included in those releases. All material assumptions and technical parameters underpinning the estimates in those announcements continue to apply and have not materially changed. This announcement contains forward-looking statements. AuKing has concluded that it has a reasonable basis for providing these forward-looking statements and believes it has a reasonable basis to expect it will be able to fund development of the Koongie Park Project. However, several factors could cause actual results or expectations to differ materially from the results expressed or implied in the forward-looking statements. Given the uncertainties involved, investors should not make any investment decisions based solely on the results of this study. The Study has been completed to a level of accuracy of +/-30% in line with industry standard accuracy for this stage of development. All dollar figures are presented in Australian dollars (AUD) except where specifically otherwise indicated. 2 Koongie Park copper mine development to progress after positive Scoping Study results Key Highlights Scoping Study confirms the potential for a financially robust, globally competitive copper/zinc project in north-east Western Australia, including nearby deposits owned by Cazaly Resources Ltd (ASX:CAZ). • Mineralisation to be sourced from four open pit mines (Sandiego, Mt Angelo North, Onedin and a later-staged operation at the low-grade Bommie) and an underground mine at Sandiego – all to be processed from a central facility at Sandiego • Total Mineral Resource Estimates (MRE) across the deposits are: Sandiego – 4.1Mt @ 1.38% Cu, 4.28% Zn, 25g/t Ag Onedin – 4.8Mt @ 0.7% Cu, 3.2% Zn, 0.3g/t Au and 38g/t Ag Mt Angelo North – 1.72Mt @ 1.4% Cu, 1.4% Zn and 12.3g/t Ag of which 86% is in the Indicated category across these three deposits, and Bommie – 95.6Mt @ 0.27% Cu of which 17% is in the Indicated category • Life-of-Mine (LOM) of 11 years with an estimated total production of 110kt Cu, 38kt Zn and 355koz Ag • Processing nameplate capacity is 750ktpa of run-of-mine (ROM) ore Strong project economics and financial returns • Pre-production Capex of A$134M, with an estimated 2.45 years payback period • Robust pre-tax NPV8% of approximately A$176.9M and 39.7% IRR • Life of Mine EBITDA of A$443.8M with an average operating cashflow of A$40.3M per annum. Board approval to proceed with further study work • AKN is currently finalising its forward work plan for next stage studies. The Company has sufficient funds to commence further study work and to fund ongoing exploration. 3 AuKing Mining Limited CEO, Paul Williams commented, “The results of the Scoping Study show the potential to establish a significant copper/zinc mining operation near Halls Creek in north-east Western Australia. The exploration team worked extremely hard throughout late 2021 and 2022 to provide a solid foundation for the Scoping Study. The proposed contribution of the nearby deposits of Cazaly Resources also makes a significant contribution to the project economics. “The AuKing Board is delighted with the robustness of the Project and its resilience to multiple factors that the resource industry is experiencing in Western Australia with increasing cost escalation and market conditions. The development team will now diligently progress all the necessary technical components and engineering work streams to ensure the Project is sufficiently de-risked allowing the Company to progress further development studies and possibly a final investment decision late next year. The Board has approved the commencement of further studies at the Project due to the compelling economics and the continuing strong copper market fundamentals.” Figure 1 – Koongie Park Project deposit locations 4 Key Project Metrics Key metrics below for the Koongie Park Scoping Study are set out below. Key Metrics Unit Value LOM Ore Mined & Processed tonnes, Mt 8,087,891 LOM Copper Production tonnes, t 109,893 LOM Zinc Production tonnes, t 38,405 LOM Years 11.45 LOM Average Product Grade – Copper % 1.72 LOM Average Product Grade – Zinc % 1.06 NPV (8%) (Pre-Tax) AUD M 176.9 IRR (Pre-Tax) % 39.7 Payback (start of production) # Years 2.45 Initial Capex AUD M 134.6 C1 Costs1 AUD/t Concentrate 7,197 Average Copper Price USD/lb 3.90 Average Zinc Price USD/lb 1.33 Average Annual Revenue AUD M 143.6 Average Annual OPEX AUD M 103.3 Average Annual EBITDA AUD M 40.3 Table 1 – Koongie Park Project Key Metrics 1. Cash operating costs include all mining, processing, transport, freight to port, port costs and site administration. Excludes sustaining capital and WA Royalties. The Scoping Study has been completed with the assistance of highly experienced and reputable independent consultants based in Western Australia, overseen by Wave International as Project Manager. Wave International is a resource development consultant with more than twenty years of global experience in engineering, project delivery, project, and asset management. 5 The Scoping Study was completed to an overall estimating accuracy of +/-30% (Class 5 estimate) and has a basis date for Q2 CY23. The Project is based on a 750ktpa mining and processing operation with the Study demonstrating strong financial metrics. The preliminary economic evaluation indicates the Koongie Park Project will generate significant net cash flows over an initial 11 year life-of-mine (LOM) with a capital payback of 2.4 years following first production. Capital Costs Capital costs are derived from various sources including the engineering database of Wave International and estimates based on recent actual pricing from similar WA mining operations. They include all pre-production site, processing plant, tailings dam and mining development and also sustaining capital post-production target start-up, as illustrated below: Pre-Production Capital Value ($M) Site Infrastructure 11.7 Processing Facilities 60 Water Management 3.6 Underground Development 0 Open Pit Development 2.2 Total Pre-Production 77.5 Sustaining Capital – Life of Mine 59 Indirect Costs 34 20% Contingency 23 Total 134.5 Table 2 – Koongie Park Project Capital Cost Requirement Operating Costs Operating costs are derived from a number of sources including quotations supplied by vendors, the engineering database of Wave International and estimates based on similar WA mining operations. 6 Operating Costs $M $/t milled $/t payable Mining 649 80 4,375 Processing1 421 52 2,838 C1 Cash Cost 1,070 132 7,222 Royalty 79 9 532 Sustaining Capital 59 7 397 1,208 148 8,143 All-in Sustaining Cost (AISC)2 Table 3 – Koongie Park Project Operating Costs Breakdown 1. Processing costs include all site G&A, transportation and treatment charges. Excludes sustaining capital and WA Royalties. 2. All-In Sustaining Cost (AISC) includes C1 cash cost, royalties and sustaining capital. It does not include corporate cost, exploration cost and non-sustaining capital. Other Considerations Funding In order to achieve the range of outcomes indicated in the Scoping Study, funding in the order of $135M will likely be required to commence production. AuKing has formed the view that there is a reasonable basis to believe that requisite funding for development of the Project will be available when required. The grounds on which this reasonable basis is established include:  The Project has strong technical and economic fundamentals which provides an attractive return on capital investment and generates robust cashflows at conservative copper price assumptions. This provides a solid platform to source debt and equity funding.  The Project presents an opportunity for the establishment of a significant copper/zinc/silver operation in a Tier One mining jurisdiction, with an estimated mine life of almost 12 years. In the current market where there is an expanding trend towards electrification and green energy, the Project appears ideally placed to attract investor and other funding support as development progresses.  In a relatively short period of time, AuKing has established a track record of securing funding for the conduct of development activities at Koongie Park as and when funding has been required.  It is AuKing’s intention to appoint a corporate finance advisor in the near term to 7 assist with the sourcing of debt and equity funding as and when it is required over the next few years. There is, however, no certainty that AuKing will be able to source funding as and when required. Typical project development financing would involve a combination of debt and equity. It is possible that such funding may only be available on terms that are dilutive to or otherwise affect the value of AuKing’s existing shares. Status of government agreements and approvals critical to Project viability All of the working areas in the Scoping Study (with the exception of Bommie) are on approved mining licences with no current issues or outstanding requirements with DMIRS. There are no third party unresolved matters that are likely to impact upon approvals. In the case of the Bommie deposit, mining activities are not intended until year 8 of the mining schedule by which time it is expected that any unresolved statutory or commercial issues have been settled. Onedin and the AmmLeach® Process AuKing has conducted a series of small-scale tests on the oxide and transitional ores at the Onedin deposit to assess the potential application of the AmmLeach® ammonia-leaching process. This testwork program, which has been registered with the Commonwealth Government’s R&D Incentive program is seeking to assess the potential to establish an alternative processing methodology for these Onedin ores that produces high recoveries. A significant amount of further testwork is planned here, based around a proposed prefeasibility study to be managed by Perth-based Simulus Group. In the meantime, with the addition of a sulphidisation plant into the proposed Scoping Study metallurgical process (especially for the semi-weathered or oxide materials), a basecase processing methodology has been established and is considered appropriate for this Study. It remains to be seen whether the recoveries at Onedin utilising the AmmLeach® process can be demonstrated to exceed those expected to be achieved utilising the flotation method. Emull Deposit On 1 December 2022 AuKing announced to ASX details of a maiden resource estimate for its Emull Deposit comprising 12.2Mt @ 0.27% Cu, 0.38% Zn, 0.09% Pb and 4.9g/t Ag. As can be seen in Figure 1 above Emull is located within a close proximity to the proposed developments around the Sandiego deposit. AuKing has plans for additional drilling at Emull which is aimed at significantly increasing the existing resource estimates and these could support a future mining operation at Emull. However, at this stage, no provision for mining at Emull has been included in the Scoping Study. 8 Reasonable Basis for Forward-Looking Statements No Ore Reserve has been declared in the Study. This ASX release has been prepared in compliance with the JORC Code (2012) and the ASX Listing Rules. All material assumptions on which the Study production target and project financial information are based have been included in this release. Consideration of Modifying Factors in the format specified by JORC Code (2012) Table 1, Section 4 is attached to this release. This announcement has been authorised by Paul Williams, CEO, AuKing Mining Limited. For more information, please contact: Paul Williams Chief Executive Officer Mobile +61 419 762 487 p.williams@aukingmining.com Gareth Quinn Investor Relations Mobile + 61 417 711 108 gareth@republicpr.com.au About AuKing Mining AuKing Mining (ASX:AKN) is a mining exploration company focused on uranium, copper and zinc projects in both Tanzania and Australia. For further information www.aukingmining.com 9 KOONGIE PARK COPPER ZINC PROJECT 5943 AUKING MINING May 2023 PROJECT BRIEF Project Number 5943 Project Title KOONGIE PARK COPPER ZINC PROJECT Client AUKING MINING Client Contact Paul Williams Client Address Suite 27, Level 7, Christie Centre, 320 Adelaide Street, Brisbane QLD 4000 DOCUMENT STATUS Rev A Date Description By Reviewed Approved 29 May 2023 Scoping Report MR SW MR DISCLAIMER This document has been produced on behalf of, and for the exclusive use of the nominated recipient, and is issued for the purposes of the proposed works only. Wave International accepts no responsibility or liability whatsoever in respect to use of this document by any third party. The information contained within the document is confidential and subject to copyright. This document shall not be copied, transmitted or divulged to other parties without the prior written consent of Wave International’s duly authorised representative. i KOONGIE PARK COPPER ZINC PROJECT_ TABLE OF CONTENTS 1 INTRODUCTION ....................................................................................................... 1 1.1 SUMMARY .................................................................................................................................................................. 1 1.2 GLOSSARY ................................................................................................................................................................... 3 2 SCOPE ...................................................................................................................... 4 3 STUDY CONTRIBUTORS ............................................................................................ 5 4 LOCATION, OWNERSHIP AND TENURE ..................................................................... 6 5 4.1 LOCATION AND ACCESS .............................................................................................................................................. 6 4.2 TOPOGRAPHY AND CLIMATE ...................................................................................................................................... 6 4.3 TENURE ....................................................................................................................................................................... 7 4.4 NATIVE TITLE............................................................................................................................................................... 8 GEOLOGY AND RESOURCE ....................................................................................... 9 5.1 6 REGIONAL GEOLOGY KOONGIE PARK ......................................................................................................................... 9 5.1.1 Koongie Park Formation ............................................................................................................................... 9 5.1.2 Coolibah Tuff Member ................................................................................................................................. 9 5.1.3 Mimosa Sub-Member ................................................................................................................................. 10 5.1.4 Camp Shale Member .................................................................................................................................. 10 5.1.5 Weldon’s Creek Lava Member ................................................................................................................... 10 5.2 REGIONAL GEOLOGY MT ANGELO NORTH ............................................................................................................... 10 5.3 MINERAL RESOURCE ESTIMATE................................................................................................................................ 11 5.3.1 GENERAL ..................................................................................................................................................... 11 5.3.2 SANDIEGO ................................................................................................................................................... 11 5.3.3 ONEDIN ....................................................................................................................................................... 11 5.3.4 MT ANGELO NORTH ................................................................................................................................... 12 5.3.5 BOMMIE ..................................................................................................................................................... 13 MINING ................................................................................................................. 14 6.1 6.2 OPEN PIT MINING ..................................................................................................................................................... 14 6.1.1 GENERAL ..................................................................................................................................................... 14 6.1.2 SANDIEGO ................................................................................................................................................... 14 6.1.3 ONEDIN ....................................................................................................................................................... 17 6.1.4 MT ANGELO NORTH ................................................................................................................................... 19 6.1.5 BOMMIE ..................................................................................................................................................... 20 6.1.6 OPEN CUT MINING COSTS .......................................................................................................................... 21 UNDERGROUND MINING.......................................................................................................................................... 22 ii KOONGIE PARK COPPER ZINC PROJECT_ 7 9 CUT OFF GRADE .......................................................................................................................................... 23 6.2.2 STOPE OPTIMIZATION ................................................................................................................................ 23 6.2.3 MINE DESIGN .............................................................................................................................................. 25 6.2.4 PRODUCTION RATE..................................................................................................................................... 27 6.2.5 UNDERGROUND SCHEDULE........................................................................................................................ 28 METALLURGICAL TESTWORK.................................................................................. 29 7.1 HISTORICAL TESTWORK ............................................................................................................................................ 29 7.2 TESTWORK PROGRAMS ............................................................................................................................................ 29 7.3 8 6.2.1 7.2.1 STAGE 1 BENCHSCALE TESTWORK PROGRAM............................................................................................ 29 7.2.2 ADDITIONAL BENCHSCALE TESTWORK PROGRAM ..................................................................................... 29 CONCLUSIONS .......................................................................................................................................................... 30 MINERALS PROCESSING ......................................................................................... 31 8.1 GENERAL ................................................................................................................................................................... 31 8.2 DESIGN CRITERIA ...................................................................................................................................................... 31 8.3 PROCESS DESCRIPTION ............................................................................................................................................. 32 8.3.1 COMMINUTION .......................................................................................................................................... 33 8.3.2 FLOTATION ................................................................................................................................................. 33 8.3.3 PRODUCT HANDLING.................................................................................................................................. 34 8.3.4 REAGENTS ................................................................................................................................................... 34 8.3.5 TAILINGS DISPOSAL AND WASTE HANDLING ............................................................................................. 35 INFRASTRUCTURE AND LOGISTICS ......................................................................... 37 9.1 SITE LAYOUT ............................................................................................................................................................. 37 9.2 POWER SUPPLY ......................................................................................................................................................... 38 9.3 WATER SUPPLY ......................................................................................................................................................... 38 9.4 WATER TREATMENT ................................................................................................................................................. 38 9.5 ROADS ....................................................................................................................................................................... 38 9.6 SUPPLY CHAIN AND PRODUCT TRANSPORT ............................................................................................................. 39 9.7 NON-PROCESS BUILDINGS AND FACILITIES .............................................................................................................. 39 9.8 CAMP ACCOMMODATION ........................................................................................................................................ 39 9.9 TAILINGS ................................................................................................................................................................... 40 9.10 COMMUNICATION SYSTEMS .................................................................................................................................... 40 10 ENVIRONMENT, SOCIAL, COMMUNITY AND PERMITTING...................................... 41 10.1 EPA AND DAWE ASSESSMENT .................................................................................................................................. 41 10.2 KEY ENVIROMENTAL FACTORS ................................................................................................................................. 41 10.3 STAKEHOLDERS ......................................................................................................................................................... 42 10.4 NATIVE TITLE AND ABORIGINAL HERITAGE .............................................................................................................. 43 iii KOONGIE PARK COPPER ZINC PROJECT_ 11 IMPLEMENTATION ................................................................................................. 44 11.1 INTRODUCTION ........................................................................................................................................................ 44 11.2 KEY OBJECTIVES ........................................................................................................................................................ 44 11.3 DEVELOPMENT STRATEGY ........................................................................................................................................ 44 11.4 PROJECT IMPLEMENTATION SCHEDULE ................................................................................................................... 45 11.5 PROJECT DELIVERY STRUCTURE AND CONTRACTING STRATEGY ............................................................................. 46 11.6 OPERATIONAL READINESS ........................................................................................................................................ 48 11.6.1 RESPONSIBILITY .......................................................................................................................................... 48 11.6.2 OVERVIEW .................................................................................................................................................. 48 11.7 ASSET REGISTER ........................................................................................................................................................ 49 11.8 ORGANISATION CHART ............................................................................................................................................. 50 12 CAPITAL COST ESTIMATE ....................................................................................... 51 12.1 ESTIMATE