Quarterly Activities Report

29 July 2024

Future Metals NL

Quarterly Activities Report for quarter ended

31 June 2024

Future Metals NL ("Future Metals" or the "Company", ASX | AIM: FME) is pleased to announce its Quarterly Activities and Cashflow Report for the quarter ended 30 June 2024 (the "Quarter").

Highlights

§  During the current environment of low PGM prices, Future Metals is principally focused on:

o Drilling priority targets at Eileen Bore and within the Alice Downs Corridor, targeting new discoveries of Cu-Ni-PGM mineralisation in proximity to potential future operations at its Panton PGM Project

o Assessment of potential copper and precious metals project opportunities and/or assets within strategic proximity to the Panton PGM Project

o Low-cost development opportunities at the Panton PGM Project and continued prudent financial management

§  Post quarter end, environmental assessment completed at Panton and commencement of Heritage Survey over Alice Down Corridor and Panton North Area

§  Drilling at the Eileen Bore Prospect on schedule for September quarter on receival of heritage clearance approval

§  $295,000 of co-funded cash grants awarded under the WA Government Exploration Incentive Scheme ('EIS'):

o $180,000 for drilling at the Eileen Bore Prospect

o $115,000 for ground gravity at Panton North and across the Alice Downs Corridor

§  Received shareholder approval for the planned Options Offer of new 3-year options exercisable at 6 cents per share with an issue price of 0.025 cents each

Exploration Discussion

During the Quarter a field program for Aboriginal Heritage Surveys was planned and completed post quarter end over the Alice Downs Corridor (including the Eileen Bore Prospect) and Panton North areas. Upon approval of the survey by the Malarngowen Aboriginal Corporation, Future Metals is planning ground gravity surveys over the Alice Downs Corridor and Panton North areas as well undertaking drilling at the Eileen Bore Prospect (see Figure One). Heritage approvals are expected to be achieved within the September quarter.  

Ground Gravity

The planned ground gravity survey in the Alice Downs Corridor will provide complimentary data to the existing magnetics data along the 18km mineralised corridor.  The corridor has the potential to host multiple mineralised Ni-Cu bodies that are similar to the Copernicus Nickel Deposit. The additional data will assist in targeting buried intrusive bodies and further refining the Eileen Bore geological model prior to drilling. 

At Panton North, the additional data will be used to refine the existing geological model and depth of the Panton Intrusion.  Over the past nine months, field work and data interpretation has indicated a structural complexity at Panton not previously recognised which has the potential for further mineralisation.

Drilling

Drilling at Eileen Bore will be undertaken following receipt of clearances in respect of the Aboriginal Heritage Survey from the Malarngowen Aboriginal Corporation. The drill program aims to target extensions and determine the down-dip extent of the mineralisation in previous drilling (Drill Target 1).  Drilling will also test adjacent surface mineralisation that has not previously been subject to drilling (Drill Target 2) (see Figure Three). 

Figure One | Future Metals East Kimberley Projects, the Panton Project & Alice Downs Corridor

Alice Downs Corridor

The Alice Downs Corridor targets are located within a 20km radius of the Company's 100% owned Panton Project in the highly prospective East Kimberley region of Western Australia. Broad zones of disseminated and net-textured copper and nickel sulphides occur within multiple host intrusions and are comprised of chalcopyrite, pyrrhotite, pentlandite and pyrite. The historically mined Copernicus deposit is one such example.

The main focus of historical drilling has been on the near-surface mineralisation at Eileen Bore; the down-dip extent of the historic mineralisation is planned to be tested in the September quarter. 

Figure Two | Regional Plan showing main targets along the Alice Downs Corridor's 18km strike. 

Note the location of the Eileen Bore Drilling inset map for Figure Three.

Eileen Bore Prospect

The Eileen Bore Prospect is an advanced exploration target with historical third-party drilling confirming wide zones of consistent Cu-Ni-PGM mineralisation from surface along a known strike of approximately 300m. Mineralisation remains open down dip and at depth, with mineralisation only tested to 96m vertical below surface.

A total of 5,761m over 60 holes have previously been drilled at Eileen Bore. This historical drilling confirms a disseminated Cu-Ni-PGM magmatic sulphide body within a gabbro-pyroxenite host extending over ~300m of strike. Multiple holes have ended in mineralisation and modelling suggests that mineralisation is focused within a synformal fold axis and is plunging to the north-northwest.  This interpreted orientation remains open with scope for significant additional mineralisation.

Historical drilling results include:

o   120m @ 0.73% Cu, 0.29% Ni & 0.86g/t PGM_3E from 0m (EOH) ^{(EBRC 010)}

§ Incl. 16m @ 1.0% Cu, 0.36% Ni & 0.99g/t PGM_3E from 100m

o   96m @ 0.70% Cu, 0.29% Ni & 0.78g/t PGM_3E from 24m (EOH) ^{(EBRC 003)}

§ Incl. 10m @ 1.08% Cu, 0.34% Ni & 1.04g/t PGM_3E from 56m

o   84m @ 0.54% Cu, 0.24% Ni & 0.75g/t PGM_3E from 36m (EOH) ^{(EBRC 011)}

o   47m @ 0.62% Cu, 0.30% Ni & 0.60g/t PGM_3E from 3m ^(AD07)

o   36m @ 0.53% Cu, 0.25% Ni & 0.59g/t PGM_3E from 40m ^{(EBRC 002)}

o   64m @ 0.77% Cu, & 0.30% Ni from 32m (EoH) ^(EP09)

o   52m @ 0.74% Cu, & 0.29% Ni from 10m ^(EP08)

To the north, Drill Target 2 is based on coincident magmatic chalcopyrite-pyrrhotite mineralisation identified in peridotite rock chips and confirmed by petrology.  These rocks chips are associated with Ni-Cu, PGE and Au soil anomalism. There is no historic drill testing in the area. Drill Target 1 and Drill Target 2 are outlined in Figure Three below.

Figure Three | Eileen Bore Prospect showing drill areas: down plunge mineralisation     and Drill Targets 1 and 2.

EIS Funding

The Company has been successful in two applications for co-funding under the Western Australian Government's Exploration Incentive Scheme ('EIS').

As part of the EIS Round 27 co-funded drilling program, A$180,000 has been granted for drilling at Eileen Bore within the Alice Downs Corridor and A$115,000 has been granted for ground gravity at Panton North and across the Alice Downs Corridor.  The ground gravity is part of the Venture 1 co-funding geophysical grant (maiden year).

Project Generation

During the Quarter, the Company continued to actively review and undertake due diligence on resources assets which complement the development and exploration strategy of Future Metals at the Panton PGM Project and the Eileen Bore Cu-Ni-PGM Project.

The Company is focused on assessing and undertaking due diligence on brownfield project opportunities within the copper and precious metals sectors, in addition to all opportunities within a strategic proximity to the Panton PGM Project.

The Company will keep investors informed of any material developments in regard to new project opportunities if and when they arise, however there is no guarantee of any resulting transactions.

Corporate

Options Entitlement Offer

During the Quarter the Company announced a proposed Options Offer to subscribe for 1 new option for every 1 FMEO ASX-listed option held at an issue price of 0.025 cents per new option, raising a nominal A$40,000 (before costs). The ASX listed FMEO options expired on 11 June 2024.

Each new option will be exercisable at a price of 6 cents per share and expire 3 years from their date of issue. The Company engaged CPS Capital Group Pty Ltd to act as underwriter for the full Option Offer, being 100% of the funds to be raised under the Options Offer based on the number of FMEO options on issue at the date of the Prospectus.

The Company obtained shareholder approval for the Offer at the end of the Quarter. The Company expects to lodge a Prospectus with ASX/ASIC imminently.

Cost Rationalisation and R&D Rebate Application

During the Quarter the Company continued to progress the reduction in discretionary corporate expenditure to reduce overheads and maintain cash during the current period of low PGM prices. The Company will continue to assess and progress further corporate cost-cutting measures into the September quarter.  

The Company has also made an application with the Research and Development (R&D) Tax Incentive Program, an Australian Government initiative for provision of funding for innovation, research and development. The Australian Tax Office and the Department of Industry, Science and Resources jointly administer the R&D tax incentive program. The application is currently undergoing the review process. The R&D work completed by Future Metals to date, in particular in the unlocking of the Panton metallurgical flowsheet, represents the culmination of approximately 20 years of research, development and innovation toward the development of the project.

Financial Commentary

The Quarterly Cashflow Report (Appendix 5B) for the period ended 30 June 2024 provides an overview of the Company's financial activities.

The Quarterly Cashflow Report (Appendix 5B) is available at the following link: http://www.rns-pdf.londonstockexchange.com/rns/1922Y_1-2024-7-29.pdf and on the Company's website.

The Company held approximately A$2.28m in cash at the end of the Quarter.

Exploration and project development expenditure during the Quarter amounted to approximately A$471k. Payments for administration and corporate costs amounted to approximately A$231k. This included payments to related parties and their associates of A$127k, comprising Director fees and remuneration (including superannuation).

For additional information please refer to the ASX/AIM announcements covered in this report: