Alien Metals Regulatory News (UFO)

Trading Symbols

AIM: UFO

FWB: I3A1

24th October 2022

Alien Metals Ltd

("Alien" or "the Company")

IOCA update: progressing towards becoming an Iron Ore miner

Alien Metals Ltd (LSE AIM:UFO), a global minerals exploration and development Company, is pleased to provide an update on its wholly-owned subsidiary Iron Ore Company of Australia Pty Ltd ("IOCA"), including progress on the Company's flagship project, the Hancock Iron Ore Project ("Hancock" or the "Project"), which is anticipated to start production in 2023. This follows on from management's recent site visits to all the Company's Australian projects and the first under new Chairman, Roderick McIllree

Highlights:

· Signed exclusive agreement with Anglo American to finalise a US$15 million funding package and 100% of offtake ahead of the commencement of production in 2023

· Updated terms of the option to acquire a 90% interest in the Hancock and Brockman tenements

· Metallurgical test work programme completed with optimised and simple flow sheet identified

· Heritage clearance expected in Q4 2022

· Mining licence expected to be granted in Q1 2023

· Tenders received for mining, crushing, screening and transport logistics with preferred party contract selection due in Q4 2022

· Department of main roads approval for construction of mine road intersection with the Great Northern Highway

· Expected availability at Port Headland's Utah Point ship loading facilities indicated to coincide with mining

· Approval to get tenement ELA47/3752 granted started, initial CP for acquisition from Mallina already completed

· Discussions ongoing with several strategic partners on the Company's other iron assets

· Appointment of highly experienced management team for IOCA in process

· Large potential for mine life beyond the initial expected current life of mine at Hancock still to be tested

· Rationalisation of the Company's portfolio ongoing

Roderick McIllree, Chairman of Alien Metals, commented: "The Company continues to move from strength to strength as evidenced by each of the recent agreements and deals completed for IOCA. We remain focussed on delivering a socially and environmentally sustainable iron export operation from Hancock during 2023. Importantly the Company has two other significant iron assets that appear not only commercial but have strategic value to several larger groups within the region and I am confident that future deals will be done on these in due course. Alien's portfolio of high-grade direct shipping ore ("DSO") iron projects is a standout in the small cap space, and we are excited by the potential to be the next iron ore producer to emerge in the Pilbara in Western Australia, one of the world's most stable mining jurisdictions.

"Making the transition from explorer to producer will mark a major inflection point in the Company's evolution and represent, I believe, a huge value transition for shareholders. The longer-term strategy for the Company is to deliver on multiple DSO iron mines in the Pilbara and we are currently working hard to build the team that will deliver this.

"The Company looks forward to updating the market in the coming months on the progress of this key Project and continues to be on track to be shovel ready during 2023."

Having now completed site visits to all the Australian assets and undertaken a detailed review with the Alien team and consultants what I have seen gives me great confidence regarding the future of the Company.

Hancock Project Overview:

Hancock hosts a maiden JORC compliant Inferred Mineral Resource of 10.4 million tonnes ("Mt") at 60.4% iron ("Fe") (Announcement: 22 September 2021) and from previous exploration (Annoucement:30 March 2022) over 3km strike length of new drill targets were identified from surface rock chip sampling with still well over 50% of the tenement not even visited. A further 141 rock chip samples were also collected in a recent field mapping program in the southwest area of Hancock with geological identification of further areas of DSO style iron ore and these samples will be tested with the Company's handheld XRF unit ('pXRF) to what is hoped to add even more drill targets to the current 3km in the western sector of the tenement. Based on this and being able to view the full extent of the outcropping ridges from the air the Company believes the project may be capable of supporting a much longer mining operation than has already been identified with this untapped and untested potential in the pipeline which continues to make the project more attractive to the Company.

Figure 1: Location of Hancock Iron Ore Project, Western Australia

The high grade, low impurity nature of the DSO material from Hancock means the Company is highly confident that the product will be highly sought-after and expected to receive a market premium.

Table 1: Mineral Resource Statement, Hancock Iron Ore Project, Alien Metals, September 2021

Figure 2: Rock chip sampling programme, Hancock Iron Ore Project, March 2022

The high-grade DSO nature of the iron ore, with low impurities, as evidenced in the Bulk Sample and Metallurgical test work to date (Announcement: 4 February 2022), gives the Company every confidence in the high quality of the iron ore and encourages the Company to continue its current strategy to bring this project into production in 2023. Furthermore, with the high probability of discovering further DSO grade iron ore in mineable deposits on the tenement as per the above, the Company is confident of an operation that may be capable of operating continuously well beyond the initial expected current life of mine as is illustrated in Figure 2 and Table 2.

Table 2: Bulk Sample grab sample assay results, Hancock Project, February 2022

Hancock Project Economics:

The Scoping Study for Hancock (Announcement: 19 October 2021) completed by independent consultant Mining Plus confirmed the following:

· Exceptionally strong returns are possible from a potential development

· High grade deposit >60% Fe

· Low CAPEX with existing surrounding infrastructure and using 3rd party contractors to mine the project

· Low OPEX

· 1.25Mt per annum production will sustain an eight-year life of mine ("LOM") with current resource

· Exceptionally low strip ratios (c.1:1 on the Ridges deposits)

· High potential to extend mine life for several decades

Resource & Mine Planning:

Since the September 2021 Scoping Study, IOCA's exploration team have conducted further drilling campaigns at Hancock which includes Phase III and IV drilling. Whilst the results are awaited, we expect the drilling results will continue to increase the confidence and quantity of the September 2021 maiden JORC Resource, as well as continue to expand the potential of the Hancock project.

Metallurgical Test Work:

IOCA's bulk metallurgical test work conducted to date has been used to add detail to the process flow sheet for the crushing and screening circuit.

The test work conducted at the ALS laboratory in Perth confirms the quality of the iron ore produced from the resource area. The test work produced a high grade 'Fines' product with a nominal 10% lump product yield. This means in terms of onsite processing that the vast majority of product will be Fines which equates to even less processing being required, hence lower operating costs to prepare the product for shipment.

The test work programme further confirms the Company's strategy to get this project into production in 2023.

Figure 5: Simple Process Flow Sheet, Hancock Project, September 2022

Offtake, Marketing & Funding:

IOCA has granted Anglo American an exclusive right to negotiate and agree terms with IOCA for up to US$15 million in funding and 100% of offtake for an initial 3Mt from the Hancock Project, with the key terms as follows:

· US$10,000,000 in Advance Payment Facility

· 100% Offtake for Sinter Fines and Lump from the Hancock Project of 3Mt initially

· Offtake terms to include vessel prepayments for up to US$5,000,000 for the first 12 months

· Anglo American to receive an agreed royalty for 24 months

Anglo American is a leading, global mining Company with a portfolio of competitive, world class operations, including annual production of more than 60Mt of premium quality iron ore from South Africa and Brazil.

It is noted that whilst the terms of the Mandate Letter as regards to exclusivity, confidentiality and fees are expressed to be legally binding the indicative terms of any project funding and offtake are not and therefore are subject to definitive documentation.

Currently, IOCA and AA teams are working closely to finalise all the necessary documents and reports so that both parties are comfortable that the official 60-day Due Diligence period may commence. Both teams are working towards this for the end of the year to also tie in with other permitting and scheduling for 2023 mining operation commencement.

Engagement with Key Stakeholders:

IOCA's development team continue to engage with all key stakeholders.

The Company continues to engage with the Pilbara Ports Authority (PPA) for access to the Utah Point Public User Facility at Port Hedland, Western Australia, for the export of the iron ore. Meetings were recently held in Perth and Port Hedland to outline the IOCA project and capacity to receive allocation for product along the schedule lines outlined and recent communication from the PPA has continued to encourage the Company that it will receive an export allocation at this facility in line with its production profile.

Figure 6: Utah Point Public User Facility, Port Hedland, Western Australia

The Main Roads Department of Western Australia (MRWA) has approved the concept design for the intersection of the Hancock Project's haul road and the Great Northern Highway. This is a significant step and a key aspect for permitting to transport the product to market.

Figure 7: Hancock Haul Road and Great Northern Highway intersection design, June 2022

Contractor Engagement:

Early contractor engagement is continuing with experienced tried and tested 3rd party contractors currently tendering on the main operational aspects for mining such as accommodation construction, mining, crushing and screening and haulage as well as the main Capex items being the haul road and haul Road/Great Northern Highway intersection construction projects. Due to the quality of the product and its relative proximity to port and it slower sensitivity to price fluctuation in the market compared to other projects in the area, IOCA is receiving interest from several highly experienced and competitive contractors and continues to discuss options that would suit the Project development.

Provisional pricing received to date from Alien's contracting partners continues to be in line with the Scoping Study assumptions from October 2021.

Approvals & Permitting:

Work continues on permitting and approvals with the Company's target to commence production and ore shipment in 2023.

The Heritage Agreement has been finalised with the Karlka Nyiyaparli Aboriginal Corporation (KNAC) which is the Native Title representative group for the Nyiyaparli People. IOCA is now progressing heritage survey works and the commencement of Native Title Agreement negotiations. This is anticipated to be completed in Q4 2022.

An initial Mining Lease area within the tenement has been surveyed and an application has been made which is expected to be received by the end of Q1 2023.

A Miscellaneous Licence application for the Haul Road corridor has been submitted and is awaiting approval and is also anticipated to be awarded in Q1 2023.

IOCA has two main geographical hubs for development, with the Hancock Project, situated in the Newman East Pilbara Hub the most advanced currently.

Newman East Pilbara Hub

This includes the Hancock tenement, Hancock West and Northwest tenements (Announcement: 5 September 2022) and the Mallina E47/3752 tenement (Announcement: 5 September 2022), with Haul Road access to the Great Northern Hwy (see above).

Situated just 15km from Newman, a regional centre with daily flights from Perth and linked by the Great Northern Highway to Port Hedland, the Hancock Project has huge upside potential, and the Company looks forward to exploring next year to coincide with first production.

Figure 8: Planned Haul Road to Hancock deposits via E47/3752, August 2022

Figure 9: Location of Exploration licence applications, Hancock Northwest and West, August 2022

West Pilbara Hub:

This hub currently includes the Brockman E47/3953 and Vivash Gorge tenements with main access to market being the developing Ashburton Port to the west of the projects, as well as the newly developed Eliwana rail line installed by FMG to access their western assets (See Figure 10 Below).

Figure 10: IOCA's West Pilbara Hub adjacent to existing resources and infrastructure

Ongoing work:

Planned activities from the IOCA development team for the next reporting period:

• Award preferred status for key project packages

• Secure Utah Point tonnage allocation following indication

• Water bore drilling 

• Finalise offtake agreement and funding

• Further resource drilling

• Upgrade JORC Resource

• Finalise approvals and permitting

For further information please visit the Company's website at www.alienmetals.uk, or contact:

Alien Metals Limited

Bill Brodie Good, CEO & Technical Director

(via St-James' Corporate Services, Company Secretary)

Tel: +44 20 7796 8644

Beaumont Cornish Limited (Nomad)

James Biddle / Roland Cornish

www.beaumontcornish.com

Tel: +44 (0) 207 628 3396

WH Ireland Ltd (Joint Broker)

Harry Ansell / Katy Mitchell

Tel +44 (0) 207 220 1666

BlytheRay (Financial PR)

Tim Blythe / Megan Ray / Said Izagaren

Tel: +44 (0) 20 7138 3204

Competent Person

Competent Person's Statement - Exploration Results Mineral Resources and Scoping Study The information in this announcement that relates to Exploration Results, Mineral Resources and Scoping Study is based on information compiled by Mr. Bradley Toms who is the Exploration Manager and a full time employee of Alien Metals Ltd. Mr. Toms is a Member of The Australian Institute of Geoscientists and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking, to qualify as Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr. Toms consents to the inclusion in the document of the information in the form and context in which it appears. Mr Toms has declared that he holds Performance Rights in the Company.

Notes to Editors

Alien Metals Ltd is a mining exploration and development Company listed on the AIM market of the London Stock Exchange (LSE: UFO). The Company's focus is on delivering a profitable, long life direct shipping iron ore operation based out of the Pilbara in Northwest Australia. In 2019, the Company acquired 51% of the Brockman and Hancock Ranges high-grade (Direct Shipping Ore) iron ore projects and has an option in place to move to 90%.

The Company acquired 100% of the Elizabeth Hill Silver Project, which consists of the Elizabeth Hill Historic Silver Mine Mining Lease and the 115km2 exploration tenement around the mine.

In March 2022 the Company acquired 100% of the former joint venture interest in the Munni Munni Platinum Group Metals and Gold Project in the West Pilbara, Western Australia, one of Australia's major underexplored PGE and base metals projects. Munni Munni holds a historic deposit containing 2.2Moz 4E PGM: Palladium, Platinum, Gold, Rhodium.

The Company also holds silver, copper and base metal projects in various locations around the world however is currently looking at the best way to divest these for the benefit of shareholders.

Glossary

* Scoping Study outcomes based on a flat forecast 62% Fe index price of US$155 per tonne for the LOM and a flat forecast FX AUD$/USD$ of 0.71 for the LOM.

Mineral Resource - A concentration or occurrence of solid or liquid material of economic interest in or on the Earth's crust in such form, grade (or quality), and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade (or quality), continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.

DSO - Direct Shipping Ore

Deleterious Elements - Elements that can be detrimental to the overall product, such as

Phosphorus.

Green Iron Ore - High Grade > 60% Iron Ore needing least processing for manufacture of steel

Fe - Iron

Al - Aluminium

Ca - Calcium

K - Potassium

Mg - Magnesium

Mn - Manganese

Na - Sodium

P - Phosphorus

S - Sulphur

Si2O3 - Silica

Mt - Million Tonnes

BIF - Banded Iron Formation