Eclipse Metals : Ivittuut Bulk Sample Analysis Returns 99.9% Silica Result

ECLIPSE METALS LTD (ASX:EPM)

6th April 2022

ASX Announcement

IVITTUUT BULK SAMPLE ANALYSIS RETURNS 99.9% SILICA RESULT

Highlights

•  Eclipse analysis confirms high silica grade quartz (99.9% SiO2) from Ivittuut mine dumps.

•  Large (c. 220m-wide and 90m-thick) cylindrical body of in-situ high silica grade, low impurity quartz below the Ivittuut pit floor defined by historic drilling.

•  Historical assays of individual quartz intersections returned high grades ranging from 99.02 to 99.98% silica (SiO₂).

•  Historical averaged drill intersections include:

  • o Drill Hole 153 - 54m @ 97.6% SiO2 from 32m

  • o Drill Hole 165 - 24m @ 93.2% SiO2 from 12m

  • o Drill Hole 165 - 53m @ 94.8% SiO2 from 45m

•  Analysis determined the quartz can be further purified with simple processing to substantially increase grade, making it potentially suitable for semiconductors

•  Eclipse has defined an Exploration Target for high silica grade quartz at Ivittuut.

•  Eclipse plans further exploration with a view to preparing a maiden JORC 2012-compliant resource estimate for the quartz body at Ivittuut, expected in H2 2022.

•  Global quartz market is projected to reach $13.61 billion by 2026, growing at a CAGR of 6.9% from 2020 to 2030 (Persistence Market Research July 2020).

Eclipse Metals Ltd (ASX: EPM)(Eclipse Metals or the Company) is pleased to announce that recent Australian laboratory analysis of a quartz bulk sample from its Ivittuut multi-commodity project in southwest Greenland has confirmed the high silica, low impurity nature of the sample of several kilograms of quartz collected from the historical mine dumps (Figure 1) and shipped to Perth for analysis (refer to ASX release dated 17 November 2021).

Accurate analysis of quartz from below Ivittuut's historic pit determined it can be further purified with a simple acid wash process to substantially increase grade by removing impurities, potentially making it suitable for the high-tech semiconductor industry, further increasing the deposit value. Analytical results from this bulk sample, collected to assess Ivittuut's quartz quality, confirms results reported by North Atlantic Mining Associates (GEUS report 23656).

Modelling of historical exploration data from the Ivittuut deposit indicates the presence of a large (c. 220m-wide and 90m-thick) cylindrical body of in-situ high silica grade, low impurity quartz immediately below the pit floor as defined by historic drilling (Figures 2 to 4). The modelling, which supports an estimated exploration target of between 5.70 million tonnes and 5.94 million tonnes of quartz ranging between 90%

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and 95% silica (refer to ASX release dated 29 March 2021), further confirms the Company's view of the significant economic potential to exploit this high silica grade quartz body.

Cautionary Statement: The potential quantity and grade of the Exploration Target is conceptual in nature. There has been insufficient exploration work conducted to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource. The Exploration Target has been prepared based on actual exploration results described in this report including historical drilling data and geological modelling.

Analytic Method	ME‐PKG85	ME‐PKG85	ME‐PKG85	ME‐PKG85	ME‐PKG85	OA‐GRA05x
SAMPLE	SiO2	Al2O3	Fe2O3	TiO2	Cr2O3	LOI 1000
DESCRIPTION	%	%	%	%	ppm	%
I21005 acid washed	99.9	0.011	0.002	0.001	<1	0.08
I21005 no‐acid‐wash	99.4	0.137	0.113	0.005	3	0.16

Eclipse Metals Executive Chairman Carl Popal commented: "Our evaluation of historical data has unveiled massive economic potential at Ivittuut, being the world's only known commercial mine of naturally occurring cryolite but with potential to be a multi-commodity project. Our recent sampling program has verified the potential of both Ivittuut and Grønnedal-Ika to host REE mineralisation as well as base and critical metals, and now confirmed a quantifiable mass of low impurity quartz containing up to 99.9% SiO2.

"Identification of scarce heavy REEs and rare critical metals and high purity quartz has cemented our conclusion of the uniqueness of the polymetallic nature of the Ivittuut pit precinct. Overall, the recent exploration results highlighted the potential for much of the mineralisation within the pit to have economic value, thus enhancing potential economics for the redevelopment of this mine.."

BULK SAMPLE ANALYSIS

Table 1: SiO2 assay results showing effects of acid wash reducing impurities.

Figure 1: Oblique 3D view of the historic Ivittuut open cut with cryolite and fluorite (Domain 1), iron and zinc (Domain 2) and high grade quartz (Domain 3) bodies immediately below the historic pit floor *1

Figure 2: Image of the historic Ivigtût pit and waste dumps showing collection location for samples I21005

DRILL HOLE DATA

Overall, 18 historical diamond drillholes intersected the body of quartz in Domain 3. In 2012, only samples from two historical drill holes were analysed for quartz purity . Analytical data associated with each hole has been digitally captured to form a database (ASX announcement 29th March 2021).

Figure 3: Plan view of the Ivittuut Pit showing Cross Section (A to B)

The analytical data in 3D formed the basis for geological modelling (ASX announcement 29th March 2021). The high-grade quartz lies directly below the cryolite-fluorite and iron-zinc zones with the silica grade increasing below the iron-zinc zone in the northern portion of the pit (Figure 2). The zones with higher percentages of impurities coincide with the modelled zones of siderite (iron), sphalerite (zinc) and cryolite. Based on the data from the two holes which provided a total of 54 samples; 24 or 44% of the samples were higher than 98% in silica. A 95% silica cut-off represents 61% of the samples.

GEOLOGICAL MODELLING

Range	Zone	Domain	Cut Off %	Quartz Tonnage lower range t	Quartz Tonnage higher range t	Quartz Grade Lower %	Quartz Grade Upper %
Exploration Target	Quartz	3	0	5,700,000	5,940,000	90	95

Geological domaining of the historic drill hole data (Figures 2 to 4) (refer to ASX release dated 29 March 2021) defined a large (c. 220m-wide and 90m-thick) cylindrical body of quartz below the Ivittuut pit floor. The modelled quartz body represents in-situ mineralisation that could be accessed 5m to 10m below the central cryolite-fluorite zone. Immediately below the historic open pit, the quartz body thickens along an east-west axis.

Figure 4: Oblique views of the Ivittuut Geological Model

Exploration Targets (Table 2) are based on exploration results from 18 diamond drill holes, representing 1,764m of drilling within and around the historic pit. The assay data used includes 1,062 analytical results. Bulk density measurements were assigned using a lower value of SG 2.55 and an upper value of SG 2.65.

Table 2: Exploration Target reported by Mineral Domains

Cautionary Statement: The potential quantity and grade of the Exploration Target is conceptual in nature. There has been insufficient exploration work conducted to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource. The Exploration Target has been prepared based on actual exploration results described in this report including historical drilling data and geological modelling.

Figure 5: High silica grade quartz from Drill Hole 153 4

FORWARD STRATEGY

Subject to COVID restrictions, the Company is planning further exploration activities to enable calculation of a JORC Code 2012 compliant resource estimate for the Ivittuut project at the earliest opportunity, targeting delivery in H2 CY22. Further analytical work is required for the quartz zones as previous explorers did not assay all quartz intersections for contaminants. Numerous drill holes which intersected quartz mineralisation will be systematically split and analysed for contaminants to enable calculation of silica content as part of JORC (2012) compliant resource estimation work. Additional drilling may be required and will be based on further evaluation of historical exploration.

BACKGROUND INFORMATION ON THE SILICA INDUSTRY

A constantly growing glass industry in Europe demands increasing amounts of appropriate raw materials, including the most important one: glass silica. High quality quartz is composed of silica which is characterised as having minimum 95% SiO2 and low impurities of less than 0.01%. Quartz with higher contaminant levels is in demand by many industries.

Silica of varying qualities may be used not only for glass production, but also to make casting moulds in foundries; ingredients in ceramics; proppants in shale hydrocarbons extraction; fillers and extenders in polymers, paints and rubber; for water filtration and for many other uses. Quartz can also be the starting point for the manufacturing of water-soluble sodium silicates and other downstream silicon chemicals.

The global quartz market was valued at $8.23 billion in 2018 and is projected to reach $13.61 billion by 2026, growing at a CAGR of 6.9% from 2020 to 2030 (Persistence Market Research July 2020). The EU market for quartz exceeds 30 million tonnes per year (including more than 15 million tonnes per year for glass production), which is sourced through domestic production, especially in the Netherlands, Italy, France, Germany, Poland, the UK, Spain, Bulgaria and Belgium. Quartz resources for high-quality silica production are limited mostly to the above-mentioned countries, especially the Netherlands, Germany, UK, Poland and Chechnya.

The price of quartz is based on the grade - simply put, the lower the level of impurities, the higher the price. The price can be adversely affected by the quantity and the type of impurities present (Table 3).

Table 3: Pricing analysis by Grade

Grade	Price Range	Weighted ASP
Powder	US$ 1,000 - US$ 1,500	US$ 1,276
Grade I	US$ 3,500 - US$ 5,500	US$ 4,460
Grade II	US$ 7,500 - US$ 11,500	US$ 8,975
Grade III	US$ 12,500 - US$ 19,000	US$ 15,126