Project Block 103 / Iron Bear Metallurgical Test Work Produces DR Grade Magnetite Concentrate with 70.6% Fe

Cyclone Metals Limited (ASX: CLE) (Cyclone or the Company) is pleased to report the latest results of the first phase of metallurgical test work performed on its flagship Block 103 / Iron Bear Magnetite Iron Ore Project (Block 103 / Iron Bear) in Canada.

• Direct Reduction (DR) magnetite concentrate produced grading 70.6% Fe with very low deleterious elements and silica below 1.2 % which is world class
• High recovery rate of over 80% for total Fe
• The current estimated market price this DR magnetite concentrate is USD 167/t CFR China¹ which represents a premium of 30 USD/t above the 62% Fe benchmark
• DR concentrate was achieved simply by adding a reverse flotation step to the Iron Bear Blast Furnace (BF) concentrate (as outlined in the ASX release dated 28/11/23)
• The optimum process flow sheet and associated mass and energy balances have been defined and calibrated. This will flow into the pilot plant design and scoping study – both of which are underway
• The production of bulk samples of BF and DR magnetite concentrates using an industrial grade pilot plant is planned to commence next week

Cyclone CEO, Paul Berend, commented: “We have achieved another very exciting milestone in the development of our flagship Iron Bear Project by demonstrating that we can easily produce a world class magnetite DR concentrate grading 70.6% Fe, with ultra-low silica and no deleterious elements. If we can demonstrate that our DR concentrate is a good source material to produce DR grade pellets, then we will be able to provide European steel producers with a realistic solution to reduce the carbon footprint of their existing blast furnace-based steel mills. We still have months of test work ahead of us to conclusively demonstrate this – but we will be able to provide steel mills with large bulk samples of both products as early as Q1 next year. This should enable us to start meaningful JV discussions.”

Flash Operational Update

Cyclone is pleased to report that it remains on track to achieve its key Strategy on a Page (SOAP) operational milestones planned in calendar year 2023. Some elements of milestone 5 (mineral resource upgrade) might be delayed until February 2024, but the design of the pilot plant (milestone 7) and delivery of bulk samples (milestone 6) are running ahead of schedule.

The achievement of milestone 4 is significant as it demonstrates that Iron Bear / Block 103 could potentially be one of a handful of iron ore producers with the capability to produce premium DR grade concentrates. These high-quality magnetite concentrates are critical for the steel industry to reduce their carbon footprint and are expected to replace less fuel-efficient Direct Shipping Ores currently produced mainly in Australia and Brazil. Access to a large and low-cost source of DR grade magnetite concentrate could provide a very substantial structural competitive advantage to a steel mill producing in Europe, or exporting to Europe.

Concurrently, the Company is working on upgrading the mineral resource (milestone 5), in terms of size, and more importantly quality. Specifically, we are aiming to upgrade a portion of the mineral resource to JORC indicated status and also increase the size of the JORC inferred status by correlating the high-definition magnetite survey with the drilling results and applying the appropriate geological constraints. It is important to note that the outcome of this geological work is uncertain, and it is possible that no mineral resource upgrade will be achieved.

Cyclone is committed to being transparent with stakeholders and investors and will update progress on the SOAP on a regular basis.

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