URU Metals Limited Regulatory News (URU)

URU Metals Limited

("URU Metals" or "the Company")

Plan to drill on upgrading of Class 1 nickel sulphide deposit for potential supply of battery-grade nickel

URU Metals is pleased to announce that geological exploration work is intended to shortly recommence on URU's flagship Zebediela Project ("Project"), targeting battery and higher grade nickel-sulphide mineralisation to the east of the Zebediela nickel-sulphide resource.

The Zebediela Nickel Project contains an NI43-101 compliant nickel sulphide resource of over 1,600 million tons running at 0.245% Nickel, with the ability to produce over 500,000 tons of nickel using an open-pit mining method, ranking it amongst the top ten largest nickel sulphide resources globally.

Nickel sulphide deposits are the primary source for Class 1 nickel and represent approximately 40% of current known nickel resources. The remaining 60% is found in nickel laterite deposits, which are the primary source for Class 2 nickel (U.S. Geological Survey, Mineral Commodity Summaries, January 2020). Class 1 nickel is sought after for use in electric vehicle (EV) lithium-ion batteries, whilst Class 2 nickel is mainly used in nickel pig iron and the steel industry.

The Zebediela Project is located on the Northern Limb of the Bushveld Complex, South Africa, which hosts an estimated 11.9 million tons of nickel, and ranks third in terms of nickel sulphide content globally. The project is immediately adjacent to, and up-dip from, Ivanhoe Mines $1.5 billion Platreef Project, and about 15 km along strike from Anglo Platinum's flagship Mogalakwena Mining Complex. Ivanhoe Mines' Platreef Project contains a total resource of 852 million tons at 0.31% nickel, 0.16% copper and 3.5 g/t 3PGE+Au (platinum + palladium + rhodium + gold). Mogalakwena has an estimated resource of 3.8 billion tons at 0.18% nickel, 0.10% copper and 2.4 g/t 3PGE+Au.

The Company has identified a target geological zone directly east and adjacent to the existing Zebediela resource that has produced results of 0.56% nickel over a width of greater than 4 m from exploration drilling, with significant cobalt and PGE credits, resulting in a nickel equivalent grade of 3.01% nickel (metal prices as at 25 August 2020 using nickel, copper, 3PGE+Au; assumes 100% recovery for all metals). Drillhole Z017 intersected 1.7% Ni and 0.7 g/t 3PGE+Au over a width of 2.25 m, 20 m below the existing NI43-101 complaint resource.

Further exploration drilling will test this target, estimated to be approximately 5,000 metres in strike length and varying in thickness between 1.8 and 10m, from depths of 30 m below surface down to depths of greater than 400 m below surface, and the project team is confident that this drilling will result in increasing the overall grade of the project. Drilling is planned to commence in Q4 2020, subject to the Company securing the funding required for this programme.

Due to the COVID-19 lockdown in South Africa, an extension to the final submission date of the Environmental Impact Assessment (EIA) and Environmental Management Program (EMPR) was granted by the South African Department of Mineral Resources and Energy (DMRE), and these reports are to be submitted on 15 January 2021. The EIA is currently underway in order to ensure that future mining on the project is done in the most environmentally friendly manner possible, in order to share the Company's vision of a "green nickel development".

Next Steps

A 12-hole drill programme is expected to commence in October 2020, and is expected to be completed in March 2021, subject to funding. The results of this drilling program will allow the company to estimate the amount of infill drilling required to update the project resource statement.

In parallel to the exploration drilling, EIA studies continue, and the submission of the EIA to the DMRE will be made in Q1 2021, and is a crucial step in allowing the DMRE to award a mining right to the Company.

John Zorbas, CEO of URU Metals, commented:

With the current trend of increasing demand for Class 1 nickel in battery technologies, we see a tremendous long-term growth potential for the nickel market. URU's Zebediela nickel sulphide deposit, located in a burgeoning nickel-PGE mining belt, is potentially an important future source of Class 1 nickel due to a lack of major nickel sulphide mines coming online in recent years. URU is looking to improve the current project economics by targeting a higher-grade nickel resource, and ultimately develop the project in an environmentally friendly manner, eventually contributing towards green energy and helping to meet the increasing demand for battery-grade nickel products for use in the electric vehicle markets.

Competent Person Statement

The information in this release has been compiled and reviewed by Richard Montjoie, the Exploration Manager for the Zebediela Project. Mr. Montjoie holds a M.Sc. Honours in Economic Geology from the University of Witwatersrand, South Africa, and is fellow of the Geological Society of South Africa (GSSA) and a registered member of the South African Council for Natural Scientific Professions (SACNASP). He has over 17 years' experience in mineral project development globally. Richard has been involved in several exploration programs in South Africa and Northern Canada, including various Ni-PGE, diamond, coal, coal bed methane and gold exploration and mining projects. Richard provides sound geoscientific input in development planning to ensure effective data acquisition, management and project execution. Richard successfully acted as Project Manager for a 39 million ounce platinum feasibility study, advancing the project from exploration stage to a completed bankable feasibility study with proven and probable reserves, on time and under budget, managing all aspects of the programme, from exploration programme design to various licencing applications. Mr. Montjoie is a Qualified Person for the purposes of the AIM Note for Mining and Oil & Gas Companies.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

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