2 August 2023 NORTH STANMORE INITIAL MINERAL RESOURCE ESTIMATE High-Value Large-Scale Rare Earth Deposit Confirmed Highlights o Initial Inferred Mineral Resource of 250Mt at 520ppm Total Rare Earth Oxide (‘TREYO’), containing 130,000t of contained TREYO, estimated at Victory’s North Stanmore Rare Earth Element (‘REE’) Project. o Substantial (33%) heavy rare earth oxide (‘HREO’) to TREYO percentage, positioning it as one of Australia’s most enriched HREO deposits. o 54% critical metals as identified by the US Government 20221. o Resource modelling was based on 1,161m of drill assays averaging 828ppm of TREYO above a 400-ppm cut-off.2 o High percentage of critical magnet metals Dysprosium (‘Dy’) and Terbium (‘Tb’) totalling 3.6%, and Neodymium (‘Nd’) and Praseodymium (‘Pr’) combined totalling 21.5% TREYO. o Low cut-off grades were selected due to North Stanmore hosting valuable basket price and high percentages of HREO. o Initial Inferred Mineral Resource Estimate covers only 18% of the area drilled within confirmed REE mineralisation. o Promising Metallurgical testwork conducted to date has achieved the following: o identified a low cost REE metal recovery process. o potential to increase the recoverable TREYO grade through increased mining selectivity and implementation of proven beneficiation techniques to target enriched size fractions. Metallurgical beneficiation testwork on samples has suggested a potential to increase plant feed grades by up to 148%3. o An Exploration Target has also been estimated representing the potential extension of North Stanmore. *The potential quantity and grade of this exploration target is conceptual in nature, there is currently insufficient exploration completed to support a mineral resource estimate of this size and it is uncertain whether continued exploration will result in the estimation of a JORC reprice. The Exploration Target has been prepared in accordance with the JORC Code (2012). Victory’s Chief Executive Officer and Executive Director Brendan Clark, commented: “We are extremely proud to report one of Australia's largest heavy rare earth enriched ionic clay/regolith hosted Inferred Mineral Resource Estimates with imminent potential to rapidly 1 https://www.iea.org/policies/15271-final-list-of-critical-minerals-2022, excluding (La) and (Ce). 2 For full details including JORC tables refer to ASX announcements dated: 15 May 2023, 17 April 2023, 13 February 2023, 15 November 2022, 11 October 2022. 3 First reported in announcement dated 6 July 2023 and titled “Rare Earth Feed Grades Increased By Up To 148%”. The company confirms that it is not aware of any new information or data that materially affects the information included in the original announcement. The company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement. Page 1 ‘THE FUTURE OF AUSTRALIAN RARE EARTHS’ ACN: 124 279 750 E: info@victorymetalsaustralia.com D: +61 (08) 6555 2950 A: Suite 1, 295 Rokeby Road, Subiaco, WA, 6008 increase these market-leading results with infill drilling over a large area of North Stanmore where previous drilling has identified rare earth element mineralisation.” “This significant milestone solidifies our position as a frontrunner in the Australian rare earth mining industry for ionic clay/regolith discoveries and underscores our commitment to unlocking the immense potential of our country's natural resources.” “No rare earth project can be looked at the same. Victory has proven North Stanmore to be a unique and premium system with outstanding grades of heavy rare earth elements that include Dysprosium and Terbium which are predicted to face a supply deficit of 70% by 20304, creating a favourable product market conditions for Victory.” “Victory looks forward to innovatively leveraging this Mineral Resource Estimate to drive growth and value for our shareholders as the Company enters a new exciting phase." Victory Metals Limited (ASX:VTM) (‘Victory’ or ‘the Company’) is pleased to announce the initial Inferred Mineral Resource Estimate at the North Stanmore Rare Earth Element Project (‘North Stanmore’ or the ‘Project’) in Cue, Western Australia. At a 400 ppm TREYO cut-off, the Inferred Mineral Resource stands at 250Mt at 520ppm TREYO and contains HREO/TREO ratios of 33%, and significant ratios of Dy and Tb (DyTb) totalling 3.6% TREYO. The size and quality of the North Stanmore REE Project positions Victory at the forefront of the ionic and regolith REE industry in Australia. Project Summary The North Stanmore REE Project is located ~10 km from the Cue township in Western Australia, which is accessible by one of Australia’s major arterial networks, the Great Northern Highway. The project is known for hosting exceptional grades of Dy and Tb, which are highly sought after in the current rare earth market. Additionally, the project has high heavy rare earth ratios, further adding to its economic potential. The proximity of the project to the Cue township provides convenient access to infrastructure and support services. North Stanmore REE Project represents a premium discovery in Australia due to its logistical advantages, high metallurgical recoveries, high ratios of heavy rare earth elements (HREO/TREYO), feed grade beneficiation upside and favourable tenement holding conditions of being situated on Crown land. Mineral Resource Estimate Summary A total Inferred Mineral Resource for the North Stanmore Project of ~250Mt of REE-bearing saprolite at 520ppm TREYO for 130,000t on contained TREYO has been estimated by RSC using a cut-off of 400ppm TREYO (Table 1 and Table 2). 4 https://www.mckinsey.com/industries/metals-and-mining/our-insights/the-net-zero-materials-transition-implications-for-global-supply-chains#/ Page 2 ‘THE FUTURE OF AUSTRALIAN RARE EARTHS’ ACN: 124 279 750 E: info@victorymetalsaustralia.com D: +61 (08) 6555 2950 A: Suite 1, 295 Rokeby Road, Subiaco, WA, 6008 Table 1: North Stanmore Inferred Mineral Resource summary for TREYO, MREO, HREO and NdPr. Cut-off (TREYO ppm) Mt TREYO (ppm) MREO (ppm) HREO (ppm) NdPr (ppm) TREYO (t) 400 250 520 110 170 90 130,000 Inferred Notes: 1. Mineral Resource is classified in accordance with the JORC Code (2012). 2. Estimates are rounded to reflect the level of confidence in the Mineral Resources at the time of reporting. Table 2: North Stanmore Inferred Mineral Resource individual REO grades.5 Inferred La2O3 (ppm) CeO2 (ppm) Pr6O11 (ppm) Nd2O3 (ppm) Sm2O3 (ppm) Eu2O3 (ppm) Gd2O3 (ppm) Tb4O7 (ppm) Dy2O3 (ppm) Ho2O3 (ppm) Er2O3 (ppm) Tm2O3 (ppm) Yb2O3 (ppm) Lu2O3 (ppm) Y2O3 (ppm) 80 160 20 70 10 5 10 2 20 3 10 1 9 1 110 Notes: 1. Reported above a 400 ppm TREYO cut-off. TREYO (Total Rare Earth Oxide including yttrium) = La2O3 + CeO2 + Pr6O11 + Nd2O3 + Sm2O3 + Eu2O3 + Gd2O3 + Tb4O7 + Dy2O3 + Ho2O3 + Er2O3 + Tm2O3 + Yb2O3 + Lu2O3 + Y2O3. 2. Estimates are rounded to reflect the level of confidence in the Mineral Resources at the time of reporting. Differences may occur in totals due to rounding. Table 3: North Stanmore Inferred Mineral Resource summary for TREYO, MREO, HREO and NdPr presented at various TREYO cut-off grades. Cut-off (TREYO ppm) Mt TREYO (ppm) MREO (ppm) HREO (ppm) NdPr (ppm) TREYO (t) Inferred 300 306 490 100 160 85 150,000 Inferred 400 250 520 110 170 90 130,000 Inferred 500 127 590 130 200 105 75,000 Notes: 1. Reported at various cut-off grades as specified. 2. Estimates are rounded to reflect the level of confidence in the Mineral Resource at the time of reporting. Differences may occur in totals due to rounding. 5 Refer to ASX announcements dated 15 May 2023, 17 April 2023, 13 February 2023, 15 November 2022, 11 October 2022 for full details including JORC tables. Page 3 ‘THE FUTURE OF AUSTRALIAN RARE EARTHS’ ACN: 124 279 750 E: info@victorymetalsaustralia.com D: +61 (08) 6555 2950 A: Suite 1, 295 Rokeby Road, Subiaco, WA, 6008 Figure 1: Map showing Victory Metals’ 100% owned North Stanmore tenement package and pending tenements, with the MRE and exploration target areas highlighted. Exploration Target An Exploration Target of 700–1,100Mt at a grade range of 300–500ppm TREYO, representing the potential extension of North Stanmore, has also been estimated by RSC (Table 4). The potential quantity and grade of the Exploration Target is conceptual in nature; there has been insufficient exploration completed to estimate a mineral resource estimate and it is uncertain if further exploration will result in the estimation of further Mineral Resources at North Stanmore. Page 4 ‘THE FUTURE OF AUSTRALIAN RARE EARTHS’ ACN: 124 279 750 E: info@victorymetalsaustralia.com D: +61 (08) 6555 2950 A: Suite 1, 295 Rokeby Road, Subiaco, WA, 6008 The Exploration Target is based on Exploration Results that have been previously reported6, including assays from a mix of aircore (‘AC’) and reverse circulation (‘RC’) drillholes. Drill hole spacing varies, but the widest, regular spacing is 250 m x 1,250 m (Figure 1). The Exploration Target was estimated within a 150 ppm TREYO grade shell, restricted within the saprolite layer. A density of 2 g/cm3 was assumed for the density of the saprolite. Drill hole spacing varies across the Exploration Target and therefore weighted averages were used to estimate the TREYO grade. Table 4: North Stanmore Exploration Target. TREYO Grade (range) ppm Exploration Target Tonnage (range) Mt 300–500 700–1,100 Planned Exploration As Victory unveil this Inferred Mineral Resource estimate and Exploration Target, it is essential to highlight the Company’s commitment to advancing exploration activities. Victory is fully aware of the potential that lies within this Exploration Target and are eager to commence exploration within the next two quarters to test its validity by way of Aircore (AC) drilling. Victory’s dedicated team of experts has meticulously analysed and assessed the geological data available, allowing the Company to confidently plan for this upcoming exploration phase. Victory understands the importance of timely action and the value it brings to shareholders. The commencement of exploration within the next two quarters demonstrates Victory’s proactive approach to unlocking the full potential of rare earth element reserves. By initiating this exploration phase, the Company aims to further extend the mineral resource base, enhance the value of the Company, and solidify Victory’s position in the market. In compliance with ASX Listing Rule 5.8.1, the Company provides information on geology, sampling, drilling, analysis, estimation, cut-off grades and mining and metallurgical considerations material to understanding the Inferred Mineral Resource below. Geology & Mineralisation Regional Geology Victory’s tenements lie north of Cue, within the centre of the Murchison Province, which comprises the Archaean gneiss-granitoid-greenstone north-western Yilgarn Block. The Archean greenstone belts in the Murchison Province, the Warda Warra and Dalgaranga greenstone belts, the southern parts of the Meekatharra-Mount Magnet and Weld Range belts are dominated by metamorphosed supracrustal mafic volcanic rocks, as well as sedimentary and intrusive rocks. Thermo-tectonism resulted in development of large-scale fold structures that were subsequently disrupted by late faults. The greenstone belts were intruded by two suites of granitoids. The first, most voluminous suite, comprises granitoids that are recrystallised with foliated margins and massive cores, typically containing large enclaves of gneiss. The second suite consists of relatively small, post tectonic intrusions. 6 Refer to ASX announcements dated 15 May 2023, 17 April 2023, 13 February 2023, 15 November 2022 and 11 October 2022 for full details including JORC tables. Page 5 ‘THE FUTURE OF AUSTRALIAN RARE EARTHS’ ACN: 124 279 750 E: info@victorymetalsaustralia.com D: +61 (08) 6555 2950 A: Suite 1, 295 Rokeby Road, Subiaco, WA, 6008 Two large Archaean gabbroid intrusions occur south of Cue. These are the Dalgaranga-Mount Farmer gabbroid complex in the southwest, and the layered Windimurra gabbroid complex in the southeast. The North Stanmore alkaline intrusion7, north of Cue, was not recognised on regional geological maps. The petrological and geochemical data indicate that it is post-tectonic and thus post Archean in age. Similar alkaline intrusions in the vicinity of Cue are interpreted to be related to the early Proterozoic plume track responsible for alkaline magmatism, that extends in a belt from Mt Weld through Leonora to Cue. Project Geology & Mineralisation The regolith-hosted mineralisation overlies the North Stanmore alkaline intrusion. The REE mineralisation is regolith hosted. Assays report that REEs are enriched through the regolith profile and thus are not hosted in residual mineral phases from the source alkaline intrusion. MLA studies show that the REEs are mainly hosted by sub-20-µm phases interpreted to be churchite (after xenotime) and rhabdophane (after monazite). Drilling Techniques Air core (AC) and reverse circulation (RC) drilling was undertaken by Orlando Drilling (Perthbased) and Seismic Drilling (Wangara-based). A three-bladed steel or tungsten drill bit was used to penetrate and allow sampling of the regolith (weathered layer of loose soil and rock fragments) developed above the North Stanmore alkaline intrusion. Victory completed two AC drill programmes at North Stanmore during the period May– December 2022 and one RC drill programme during December 2022. The Mineral Resource Estimate includes a total of 238 shallow vertical to near-vertical AC drill holes (14,152 m) and 50 vertical RC drill holes (3,166 m), for a combined total of 17,318 m (Figure 1; Appendix 1) Sampling, Sub-Sampling and Analytical Techniques Drill samples were collected as 1-m samples and placed on top of black plastic that was laid on the natural ground surface to prevent contamination. Samples were placed in separate piles and in orderly rows. A handheld spade was used to collect 4-m composite samplers which were anlysed using a portable X-ray fluorescence (pXRF) analyser (Olympus Vanta) to determine the presence of anomalous (>200 ppm) REE (rare earth element) vector elements (La, Ce, Nd and Y). Anomalous 1-m drill samples were assayed by ALS Perth using ME-MS81 (lithium tetraborate fusion digestion, and inductively coupled plasma mass spectrometry (ICP-MS) analysis) and ME-4ACD81 (four acid digestion and MS analysis) for transition elements and scandium (Sc). A selection of OREAS certified reference material (OREAS 147, 460, 20a, 505, 45h, and SY5) were blindly inserted into the sample stream to monitor the quality of the analytical process. Repeat analyses and sample blanks were regularly assayed by ALS. 7 Major Alkaline Igneous Complex Discovered – Nickel and Rare Earth Bearing Minerals Identified in the North Stanmore Intrusion ASX Release Victory Goldfields 10 August 2022 Page 6 ‘THE FUTURE OF AUSTRALIAN RARE EARTHS’ ACN: 124 279 750 E: info@victorymetalsaustralia.com D: +61 (08) 6555 2950 A: Suite 1, 295 Rokeby Road, Subiaco, WA, 6008 Estimation Methodology The North Stanmore Mineral Resource estimate (MRE) was undertaken by RSC and is based on exploration AC and RC drilling. Drilling was conducted by Victory from May to December 2022. The data cut-off for the estimate was 21 June 2023. Victory provided the collar, survey, lithology and assay files to RSC. Missing intervals for different rare earth oxides (REOs) and total rare earth oxides (TREYOs) were ‘null’ and omitted from the estimate due to being not sampled. Geological Domains REE mineralisation at North Stanmore is hosted within a relatively flat-lying saprolite clay horizon that is covered by 0–36 m of unconsolidated colluvium. The basement consists of granitic rocks as well as mafic and ultramafic rocks. Lithological domains were created using implicit modelling workflows and based on the downhole geological logging. The saprolite domain was created from the different saprolite logging codes and lies between the base of the cover material and top of the hard rock basement. The saprolite geological domain provides a first-pass constraint of grade populations. Estimation Domains Estimation domains were modelled in 3-D based on a threshold of 150 ppm TREYO. Within the saprolite geological domain, intervals that did not contain TREYO grades were excluded from the mineralised estimation domains. No sub-domaining was used. Mineralisation remains open in all directions at North Stanmore. Estimation was extended to ~200 m, to approximately half the drill spacing beyond the lateral extent of drilling. Page 7 ‘THE FUTURE OF AUSTRALIAN RARE EARTHS’ ACN: 124 279 750 E: info@victorymetalsaustralia.com D: +61 (08) 6555 2950 A: Suite 1, 295 Rokeby Road, Subiaco, WA, 6008 Figure 2: North Stanmore perspective 3-D view of the wire frame geological model (10 vertical exaggeration). Figure 3: North Stanmore cross-section 6,973,000 mN outlining the geological and estimation domains. Page 8 ‘THE FUTURE OF AUSTRALIAN RARE EARTHS’ ACN: 124 279 750 E: info@victorymetalsaustralia.com D: +61 (08) 6555 2950 A: Suite 1, 295 Rokeby Road, Subiaco, WA, 6008 Figure 5: North Stanmore cross-section 588,610 mE outlining the geological and estimation domains. Resource Estimation Resource estimation was undertaken as follows: • • • • • • • A block model was built using a block size of 50 m x 200 m x 4 m (x,y,z). Hard domain boundaries were used for the estimation of all variables following a review of contact analysis plots. Geostatistics, variography and kriging neighbourhood analysis (KNA) were undertaken to support the search and estimation parameters used. A composite length of 4 m was selected based on the dominant sample length. Variograms displayed satisfactory structure and an acceptable level of confidence for the estimation of Inferred Mineral Resources. TREYO, La2O3, CeO2, Pr6O11, Nd2O3, Sm2O3, Eu2O3, Gd2O3, Tb4O7, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3, Y2O3 were estimated using Ordinary Kriging (OK). Estimation was completed using two passes and search neighbourhood parameters were supported by KNA. The resource model was validated visually by comparing input and output means, histograms and swath plots. Bulk Density While specific gravity analyses were completed on pulverised samples, ranging from 2.5–2.8 g/cm3, these did not represent the in-situ bulk density for the mineralised units as the results did not account for void spaces in situ. Therefore, an assumed in-situ bulk density of 2 g/cm3 was selected for the MRE based on similar geological conditions and mineralisation styles reported in nearby deposits, which range from 1.3–2.0 g/cm3. Page 9 ‘THE FUTURE OF AUSTRALIAN RARE EARTHS’ ACN: 124 279 750 E: info@victorymetalsaustralia.com D: +61 (08) 6555 2950 A: Suite 1, 295 Rokeby Road, Subiaco, WA, 6008 Figure 6: North Stanmore block model displaying estimated Mineral Resource TREYO block grades. Resource Classification The Competent Person has classified the Mineral Resource in the Inferred category in accordance with the JORC Code (2012). Geological evidence is sufficient to imply but not verify geological and grade continuity. It is based on exploration, sampling and testing information gathered through appropriate techniques from drill holes. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration. Portions of the deposit that do not have reasonable prospects for eventual economic extraction (RPEEE) are not included in the Mineral Resource. In assessing the reasonable prospects for eventual economic extraction, the Competent Person has evaluated preliminary mining, metallurgical, economic, environmental, social and geotechnical parameters. The Mineral Resource reported here is a realistic inventory of mineralisation which, under assumed and justifiable technical, economic and developmental conditions, may become economically extractable. Cut-Off Grade The Competent Person has applied a perimeter buffer of approximately 200m around the drilled area as a first-pass constraint to the Mineral Resource. This approach was supported by a visual review of the kriging efficiencies and slope of regression for the estimate of TREYO. A cut-off grade of 400 ppm TREYO was selected based on the Competent Person’s preliminary evaluation of potential mining and processing costs, as well as the expectations in the market of a significant rise in the price of rare earths, especially that of Nd, Pr and Dy, Tb, which are by far the most significant value components in the deposit. A cut-off grade of 400ppm TREYO Page 10 ‘THE FUTURE OF AUSTRALIAN RARE EARTHS’ ACN: 124 279 750 E: info@victorymetalsaustralia.com D: +61 (08) 6555 2950 A: Suite 1, 295 Rokeby Road, Subiaco, WA, 6008 presents a reasonable potential of providing the necessary head grade that would result in reasonable prospects of economic extraction, given the market expectations outlined above. It is reasonably expected that the majority of the Inferred mineral mesources could be upgraded to Indicated mineral resources with continued exploration, which will allow mining studies to be performed. These studies will help characterise the response of the orebody to selectively constraints and increased recovered grades may be sought through potential selectivity gains. Mining and Metallurgical Methods & Parameters Initial metallurgical testing was undertaken by Core Metallurgy in Brisbane over the months of February to April 20238. Testwork was initially carried out on a sample composite blend (VTM001) produced from six samples selected from the North Stanmore Project. A subsequent phase of testing was undertaken on two of these samples (#308490 and #312198). The objective of the initial metallurgical testwork programme was to establish a set of leach parameters that would be applicable to broader range of samples from the North Stanmore Project. The test results on the composite blend, targeting critical and valuable HREEs, achieved an initial extraction of up to 51%, including up to 44% Dy and 45% Tb extraction at pH 0.7. Increasing the pH to 1 resulted in marginal reductions in HREE extraction as shown in Figure 7. Figure 7: Extraction of Rare Earth Elements from Composite VTM001 (ambient temperature, 4-hour residence time, 35% w/w solids, H2SO4 as lixiviant, 0.5M (NH4)2SO4). Corresponding impurity extraction, namely Fe and Al, from composite VTM001 was reported to be relatively low in the leach testwork. A reduction in leach pH below 1, reported a small 8 Refer to ASX announcement dated 1 May 2023 titled “EXCEPTIONAL RECOVERIES OF CRITICAL HEAVY RARE ELEMENTS” Page 11 ‘THE FUTURE OF AUSTRALIAN RARE EARTHS’ ACN: 124 279 750 E: info@victorymetalsaustralia.com D: +61 (08) 6555 2950 A: Suite 1, 295 Rokeby Road, Subiaco, WA, 6008 increase in impurity extraction, comparable Fe and Al extraction was demonstrated between pH 2 and 1. Figure 8: Extraction of Impurity Elements (Iron, Aluminium) from Composite VTM001 with pH (ambient temperature, 4-hour residence time, 35% w/w solids, H2SO4 as lixiviant, 0.5M (NH4)2SO4). Subsequent testwork on individual samples with adjusted leach conditions demonstrated improved HREE extraction of up to 62%, including up to 60% Dy and 58% Tb extraction in Sample #308490. Figure 9: Extraction of Rare Earth Elements from Individual Samples (50°C temperature, 4-hour residence time, 25% w/w solids, pH 0.6 with H2SO4 as lixiviant, 0.5M (NH4)2SO4). Leach testwork focussed on the use of sulphuric acid for pH adjustment, which has key economic benefits in both operating and capital costs over hydrochloric acid. Testing utilising hydrochloric acid at pH 1, with otherwise identical standard conditions, failed to demonstrate any significant improvement to REE recovery compared with sulphuric acid, at otherwise the same leach conditions. Page 12 ‘THE FUTURE OF AUSTRALIAN RARE EARTHS’ ACN: 124 279 750 E: info@victorymetalsaustralia.com D: +61 (08) 6555 2950 A: Suite 1, 295 Rokeby Road, Subiaco, WA, 6008 Follow up diagnostic metallurgical testing was undertaken by Core Metallurgy in Brisbane over May 20239. Diagnostic leach testwork was carried out on two sample composite blends, VTM002 and VTM003, produced from 16 samples selected from the North Stanmore Project. The objective of the successful initial metallurgical testwork programme was to establish a set of typical REE clay leach parameters, while this follow up programme was to further understand REE mineralisation through diagnostic leach tests, representative of alternative processing technologies. Results of diagnostic leaching via acid baking and caustic cracking technologies on composite samples are displayed below in Figure 10 and Figure 111. Figure 10: Extraction of Rare Earth Elements from Composites VTM002 and VTM003 (200°C Acid Bake, 2-hour, 300 kg/t H2SO4 addition followed with 2-hour water leach at 25% w/w solids and ambient temperature). Figure 11: Extraction of Rare Earth Elements from Composites VTM002 and VTM003 (140°C Caustic Cracking with 70% w/w NaOH, 2-hour, followed with 2-hour pH 3 HCl leach at 25% w/w solids and ambient temperature). 9 Refer to ASX announcement dated 6 July 2023 titled “RARE EARTH FEED GRADES INCREASED BY UP TO 148% Page 13 ‘THE FUTURE OF AUSTRALIAN RARE EARTHS’ ACN: 124 279 750 E: info@victorymetalsaustralia.com D: +61 (08) 6555 2950 A: Suite 1, 295 Rokeby Road, Subiaco, WA, 6008 Acid Baking Leach Process The sulphuric acid bake has historically been, and is also currently, one of the major processes used for chemical decomposition of REE ore minerals, such as monazite, to release contained REE. Current sulfuric acid bake processes for the Bayan Obo deposit in China and the Mt. Weld deposit in Australia together account for more than half of the world's rare earth production10. In the sulfuric acid bake, the rare earth elements are converted to rare earth sulphates which are dissolved in a subsequent water leach. The conditions required to achieve mineral decomposition vary widely for different rare earth minerals. Typically, the sulphuric acid bake step may utilise elevated temperature of ~200–800°C, with a 1–4-hour residence time and an upfront addition of concentrated sulphuric acid. The REE elements are then released from the mineral phase and available to solubilise in the subsequent water leach step. Caustic Cracking Process The caustic (or alkaline) cracking process is an alternative to the sulphuric acid bake and is preferred for processing of high-grade monazite sands. The caustic cracking process decomposes the REE minerals to produce REE hydroxides which are insoluble. The REE hydroxides are then solubilised in a subsequent weak acid leach. Typically, the caustic cracking step may utilise elevated temperatures of ~120–150°C and sodium hydroxide concentration of 50–70%. with a 1–4-hour residence time. The REE elements are then solubilised in a weak acid leach at pH 3–4 using an inorganic acid11. Beneficiation Beneficiation metallurgical testing, as part of the Stage 2 metallurgical testwork programme, was undertaken by Core Metallurgy in Brisbane in June 2023. The aim of beneficiation testwork was to determine if REE can be upgraded by classification, with either screens or hydrocyclones, to reject a coarse low-grade fraction. This would be implemented upstream of REE leaching as shown below in a typical REE clay processing flowsheet (Figure 12). The rejection of low-grade ore and subsequent increase in downstream REE feed grade is likely to reduce downstream reagent consumption and equipment sizing, thereby significantly reducing operating and capital costs for the overall circuit. The beneficiation testwork was carried out on ten sample composite blends, VTM010 to VTM019, produced from 31 AC drill samples. Samples were selected from the North Stanmore Project and aligned with the resource modelling presented in this announcement. The samples, with drill collar information, used to generate composite blends are given in Appendix 2. 10 Demol, J., Ho, E., Soldenhoff, K., Senanayake, G. (2019). The sulfuric acid bake and leach route for processing of rare earth ores and concentrates: A review. Hydrometallurgy, 188, 123–139. https://doi.org/10.1016/j.hydromet.2019.05.015 11 Refer to ASX announcement dated 6 July 2023 titled “FOLLOW UP MET TESTWORK PROVIDES EXCELLENT RECOVERIES” Page 14 ‘THE FUTURE OF AUSTRALIAN RARE EARTHS’ ACN: 124 279 750 E: info@victorymetalsaustralia.com D: +61 (08) 6555 2950 A: Suite 1, 295 Rokeby Road, Subiaco, WA, 6008 Figure 12: General proposed flowsheet for REE clay processing. The impact of grain size was tested by analysing ten composites is summarised in Table 5 and has returned the following. • 58.2% of the rare earths on average report to the target size fraction of -20 µm, with a range of 46.5–70.3%. • The -20 µm size fraction only accounts for 34.7% of the total sample mass on average, with a range of 28.3–41.3%. This equates to a rejection of 65.3% on average of the feed ore to the coarse +20 µm fraction, with a rejection range of 58.2–71.7%. • The rare earth concentration in the -20 µm fraction is 68% on average higher in grade compared to the beneficiation head grade, resulting in an average grade increase from 1,308–2,192 ppm TREYO with rejection of the +20 µm fraction (Figure 13). This upgrading ranged from 42–148%. Page 15 ‘THE FUTURE OF AUSTRALIAN RARE EARTHS’ ACN: 124 279 750 E: info@victorymetalsaustralia.com D: +61 (08) 6555 2950 A: Suite 1, 295 Rokeby Road, Subiaco, WA, 6008 Table 5: Summary size by assay analysis for target -20 µm fraction. -20 µ