Taruga Minerals : Partial Drill Results For MCCP

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ASX ANNOUNCEMENT

07/02/2022

PARTIAL DRILL RESULTS FOR MCCP

Taruga Minerals Limited (ASX: TAR, Taruga or the Company) is pleased to present the partial (non-selective) assay results from the recent drilling at Morgan's Creek.

HIGHLIGHTS:

• HREO-rich(>50% HREO) and MREO-rich (>30% MREO) mineralisation from surface (soil-clay- regolith hosted) at Hydrothermal Hill indicates shallow ionic clay REE potential at Morgan's Creek (MCRC026)
• Skarn alteration system intercepted over 300m of strike at Hydrothermal Hill (open)
• Skarn alteration assemblage indicates significant base and precious metal potential
• Encouraging geochemical anomalism from partial results within the skarn including Pt, Pd, Cu, Co, Au, Ag and REE's, with distinct metal zonation
• Coarse disseminated chalcopyrite intercepted in exoskarn (MCRC049; assays pending), which can be targeted by Induced Polarisation (IP) geophysics
• Assays remain outstanding for 23 RC holes (including 2 partially returned holes) and 3 diamond holes at Morgan's Creek; with all but 12 assays returned for the 2021 Wyacca diamond drilling program.

Figure 1. Hydrothermal Hill skarn system with (A) Copper enriched magnetite-skarn float (sample # 15730) B) Rich magnetite endoskarn from within MCRC049 at Hydrothermal Hill (120m depth, assays pending); C) Intense epidote alteration within mafic-ultramafic endoskarn (MCRC049, depth 60m, assays pending); D) Coarse disseminated chalcopyrite in exoskarn zone at Hydrothermal Hill (MCRC049 168m, assays pending); E) Magnetite endoskarn in MCDD004 45m depth; and F) magnetite-pyrite endoskarn from MCRC050 (64-68m, assays pending).

	CAPITAL STRUCTURE	BOARD & MANAGEMENT		CONTACT US
	512,060,006	Thomas Line	Eric De Mori	Level 8, 99 St Georges Terrace
ASX:TAR	Shares on Issue	CEO	Non-Executive Director
Perth WA 6000
		David Chapman
tarugaminerals.com.au	44,250,000	Paul Cronin	T [phone]
	Options on issue	Non-Executive Director	Non-Executive Director
	F [phone]
	(various ex. prices
	Gary Steinepreis	Dan Smith
	and dates)	[e-mail]
	Non-Executive Director	Company Secretary

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Definitions

Endoskarn skarn of igneous origin that forms within the intrusion itself.

Exoskarn skarn formed in sedimentary units surrounding the igneous intrusion.

MREO magnetic rare earth element oxides (used in REE permanent magnets: Nd + Pr + Dy + Tb)

HREO heavy rare earth element oxides (Eu + Gd + Tb + Dy + Ho + Er + Tm + Yb + Lu + Y)

Li2CO3 Eq Lithium Carbonate Equivalent

CEO Thomas Line commented: "We have long suspected the that there is potential for ionic clay hosted REE mineralisation at Morgan's Creek, similar to that seen in the Murray Basin of South Australia. The grades and magnetic rare earth element (MREO: Nd + Pr + Dy +Tb) content from MCRC026 are comparable to ionic clay REE focussed peers, and the mineralisation is hosted in the surface-weathering profile which contains abundant clay minerals. Interestingly, the REE intercept also contains lithium, cobalt and zinc credits, which further increase the significance of the mineralisation. The market continues to experience an upward trend in MREO pricing. We will be assessing low cost, shallow exploration methods to test some of the prospective areas of shallow cover at Morgan's Creek in Q2. Once the remaining RC results are returned, we will also be sending selected samples off for metallurgical testwork."

"The identification of the Hydrothermal Hill skarn is very significant for the project. Skarns like this are rare and they are often large and heavily mineralised with base and precious metals. We are aware of several large magnetite exposures across the MCCP, which we also believe to be skarns - many of these are surrounded by historical artisanal copper (and potentially gold) workings, with some magnetite exposures extending for over 500m. The high magnetite content in the skarns allow for relatively simple geophysical exploration using magnetic geophysics. Certain rock layers in the skarn contain disseminated chalcopyrite, as seen in in MCRC049, and therefore induced polarisation (IP) geophysics will become a very useful exploration tool for targeting copper mineralisation within the skarn."

"We are now in a position to commence a highly focussed exploration program at Morgans Creek, targeting the skarn system for base and precious metals, and areas of shallow cover for REE's."

Morgan's Creek

Partial Drill Results

MCDD004

• 2.55m @ 0.1g/t Pt+Pd, 140ppm Co from 47.2m, including:

• 1. 0.35m @ 0.25g/t Pt+Pd, 0.02g/t Au, 520ppm Co from 47.2m, and o 0.7m @ 0.18g/t Pt+Pd, 140ppm Co
• 1.75m @ 0.19% TREO (24% MREO {Nd + Pr + Dy + Tb}) from 32m
• 92.1m at 53ppm Sc2O3, 556ppm V2O5 and 0.023 g/t Pt+Pd from 58.1m to EOH
  MCRC023
• 7m @ 0.15% Li2CO3 Eq from 45m
• 18m @ 52ppm Sc2O3, 524ppm V2O5 and 0.025 g/t Pt+Pd from 135m to EOH
  MCRC024
• 2m @ 0.25% TREO (24% MREO {Nd + Pr + Dy + Tb}) from 39m

• 49m @ 56ppm Sc2O3, 576ppm V2O5, 0.025 g/t Pt+Pd from 41m

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MCRC026

• 6m @ 565ppm TREO (40% HREO & 28% MREO {Nd + Pr + Dy + Tb}) from surface (soil-clay- regolith hosted) including:

1. 3m @ 732ppm TREO (42% HREO & 27% MREO {Nd + Pr + Dy + Tb}), 0.12% Li2CO3 Eq and 394ppm Co from 2m, including:
2. • 1m @ 0.11% TREO (51% HREO & 31% MREO {Nd + Pr + Dy + Tb}) from 2m

•

Figure 2. Hydrothermal Hill Prospect showing the partial drill results, outstanding drillholes, cross section lines and large magnetic anomaly associated with skarn alteration. Also shown is the skarn alteration extent identified so far, which remains open in all directions.

MCRC028

• 1m @ 0.14% Li2CO3 Eq from 100m

MCRC030 (partial assays only, no significant intercepts)

MCRC031 (partial results only)

• 33m @ 55ppm Sc2O3, 548ppm V2O5 and 0.024 g/t Pt+Pd from 68m
  MCRC050 (partial results only)
• 13m @ 55ppm Sc2O3, 552ppm V2O5, and 0.026 g/t Pt+Pd from 107m

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Technical Discussion

Rare earth element mineralisation was first identified in hard rock and weathered rock (saprock) at Morgan's Creek during the first pass reconnaissance drilling program in mid-2021. All of the REE mineralisation to date has been within and surrounding the diapiric breccias. The MCRC026 result is the first notable REE intercept from surface where the REE mineralisation is hosted within the soil-regolith layer which contains abundant clay minerals. The REE's in MCRC026 also contain a high proportion of HREE's (up to 51%) and MREE's (up to 31%: Nd + Pr

• Dy + Tb), which are the key value drivers for the REE market. The grade and thickness are comparable to ASX listed ionic clay REE focused peers, such as Australian Rare Earths (ASX: AR3) who are developing an ionic clay hosted REE deposit in the Murray Basin of South Australia. The next step is to await the final RC results to determine if there are any further notable intercepts, and then to select samples for metallurgical testwork to better understand the ease of creating a REE concentrate.

Due to the abundance of REE anomalism associated with the large diapiric breccia at Morgan's Creek, there is potential for secondary ionic clay hosted REE deposits within the shallow cover which overly the diapirs and within the plains which drain from them. It is still very early stages and further work is required to assess the potential. Due to ionic clay hosted REE deposits typically being located very close to the surface, cheap and very low impact drilling techniques using a 4WD or trailer mounted rig can be used to assess the area further, and this will form part of the drilling program in Q2 2022 CY.

The Hydrothermal Hill skarn contains key alteration minerals such as magnetite, epidote, sericite and chlorite which are typical of alteration associated with high-grade mineralised (Cu-Au) skarns. Disseminated chalcopyrite and pyrite have been identified within the endoskarn and exoskarn zones. Continued review of the alteration assemblage and final assays will assist us in vectoring toward zones where mineralisation is most likely to be at its richest.

The magnetite and disseminated chalcopyrite + pyrite within the skarn suggests that ground magnetics and Induced Polarisation (IP) geophysics will be very useful exploration tools for future drill targeting at the prospect scale. Regional aeromag will assist greatly in regional target generation, as reconnaissance exploration suggests there are other large skarn exposures throughout the broader Mount Craig Copper Project (MCCP).

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Figure 3. Geological cross section #1 showing partially returned drill results in the northernmost section at

Hydrothermal Hill skarn.

Figure 4. Geological cross section #2 showing partially returned drill results in the central section at Hydrothermal Hill

skarn.

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