Taruga Minerals Limited provided an update on the results of analytical testwork completed on drill samples from the 2021 RC drilling program at the Morgan's Creek prospect, Mt Craig Copper Project (MCCP). The positive testwork has indicated there is a high concentration of readily soluble REE's from recent drill samples at Morgan's Creek, a critical factor in determining the economic viability of REE deposits. The results of the testwork are summarised in Table 1. Ionic Adsorption Clay (IAC) REE deposits are an important source of heavy, critical and magnetic REE's. They typically occur in tropical high rainfall environments under thick laterite soils in China, Africa, Vietnam and Myanmar; however, IAC REE deposits are now being identified in basinal settings in South Australia and Western Australia.

The REE's are typically leached from underlying source rocks such as granite or gabbro by groundwater and are weakly adsorbed onto clay minerals near the intensely weathered zones. The REE's are soluble with weak acid and therefore can be extracted cheaply, using a simple metallurgical flowsheet. USGS reports that Ionic Adsorption Clay REE deposit grades are typically between 300 to 2000ppm.

According to USGS, the key factors behind their economic viability are i) acid solubility in weak acid; ii) enrichment in high-value REE's (such as heavy REE's and Magnetic REE's). Magnetic rare earths are particularly important for REE permanent magnetics, and renewable green technologies including wind turbines. Mid and heavy rare earths are especially crucial to modern defence technologies such as radar, sonar systems, and precision-guided weapons.

REE mineralisation at Morgan's Creek is hosted primarily in weathered zones near the surface. The three reported `zones' are "clay", "weathered" and "fresh" which relate primarily to the amount of clay present in the zone. Where "clay" has clay content, "fresh" has the lowest clay content, and "weathered" contains an intermediate clay content depdendent upon the degree of weathering and alteration.

The REE enrichment may be related to the large skarn alteration system identified in the 2021 drilling program, which is also a source of primary copper mineralisation. Supergene processes may be responsible for Ionic Adsorption Clay REE deposits in the upper levels of the weathering profile. The testwork was implemented to assess if the rare earth elements (REE) present in previously identified anomalous assay intercepts were readily soluble.

Samples selected for re-assay included a broad range of rock types and grade ranges including samples from the full length of Diamond Core hole MCDD004 and full length of Reverse Circulation (RC) holes MCDD010 and MCRC041. The inclusion of full hole analysis allowed for detailed analytical profiles of the clay, saprock and fresh rock REE conditions to be evaluated. The initial samples were analysed by both lithium borate fusion (fusion) and a modified ("weak") aqua regia digest (AR) (WAR) technique.

383 Samples were taken from laboratory stored pulps including 225 RC and 158 Diamond Core drill samples. The fusion analysis technique provided a complete dissolution of the minerals analysed providing a base record of elemental concentrations. These fusion results were statistically compared to original mixed acid digest results for a comparison of accuracy.

No statistically significant difference was found between original mixed acid digest results and re-assayed lithium borate fusion results. The WAR technique provided a method for assessing readily soluble elements using a standard lab acid mix in a defined volume ratio of HNO3 and HCl acid that is bulked up in water then presented to instrumentation. The comparison between fusion and WAR results as an indicative recovery provides an indication of readily soluble rare earth elements, with recovery being the percentage of the WAR extracted result compared to the fusion result.

The promising initial analysis and evaluation of indicative recoveries in clay and weathered material in particular provides support for continued exploration and further metallurgical assessment.