QXR Quarterly Activities and Cash Flow Report for Period Ended 31 December 2022

QX Resources Limited (ASX: QXR, ‘QXR’ of the ‘Company’) is pleased to present its Quarterly Report and Cash Flow Report.

HIGHLIGHTS

• Maiden RC drilling program at Turner River hard rock lithium project, with 12 holes for 1166 metres, in a prime location in the Pilbara, 15km south of Mineral Resources’ Wodgina lithium project.
  • Pegmatites and potential lithium rich micas have been intersected in drilling, based on visual observations
  • Indications of significant areas of pegmatites observed in drill pads and drill chips, extending beyond the sampled area of high-grade lithium rock chip results
  • Assay results from the first phase of the program expected in mid-February
• The continuation of the RC drill program for a further 10 holes is about to recommence at Turner River, targeting nearby extensions of potential mineralisation
• Assay results from further rock chip sampling at Turner River 1.6% & 1.1% Li2O extended the area under cover of the previously reported lepidolite (4.9% Li2O) (Carbonate Hill)
• A healthy cash balance of $3.4m plus liquid investments of ~$0.31m at 31 December 2022 after options were exercised which raised $837,500

“It has also been encouraging to see the gold price continue to strengthen in the quarter and we remain committed to ramping up exploration here when the weather permits. Our priority is to finalise trenching at the Disney-Red Dog prospect where we have reported excellent grades, and very quickly commence drilling here.”

Executive Chairman Maurice Feilich added: “In line with our multi-commodity growth strategy, the Board continues to assess a range of investments and assets that we believe will deliver value for shareholders. We are encouraged by the year ahead and QXR is well-capitalised with a strong shareholder base, a low cash burn and access to capital for funding our growth. We look forward to reporting on progress in the March quarter and beyond with a number of opportunities unfolding.”

OPERATIONS

Pilbara hard rock lithium projects - Western Australia

Hard-rock lithium projects are strategically centred around Western Australia’s prolific Pilbara province, with four projects covering 355km2 in proximity to some of Australia’s largest lithium deposits (Figure 7) consisting of Turner River (E45/6042 & E45/6065), Western Shaw (E45/4960 & E45/6107), Split Rock (E46/1367) and Yule River (E45/6159). Despite their prime location, the Company’s 100%-owned projects are largely underexplored for lithium.

Turner River (E45/6042 & E45/6065)

Rock Chip Sampling

Rock chip sampling at the Turner River Lithium project had returned grades of up to 4.90% Li2O in samples of lepidolite, (Figure 1). Assay results from additional rock chip sampling returned 1.6% & 1.1% Li2O extending the area under cover of the previously reported lepidolite at the Carbonate Hill prospect at Turner River in the north-eastern part of tenement E45/6042 (refer ASX announcement 30 Jun 2022, 8 Nov 2022).

Previous shallow trenching appears to have been seeking tin occurrences on a low hill, which may represent a carbonate rich intrusion into the exposed granite terrain. Coincident elevated tin and rare earth results (strong Li-Cs-Rb-Sn response) are from interpreted pegmatites. Initial drilling targeted the centre of this area.

Pegmatites have been observed in other areas at Turner River which will be drilled in future drilling campaigns.

Maiden RC Drill Program

A maiden 1,500 metre RC drilling programme commenced in December 2022 at QXR’s 100%-owned Turner River hard rock lithium project, located 15 km to south-east of Mineral Resources’ Wodgina lithium mine located within the Pilbara lithium province (refer ASX announcement 12 Dec 2022).

Twelve (12) holes have been completed (1166m) over an area of 400m x 300m in four drill “fences”. Pegmatites and potential lithium rich micas have been intersected, based on visual observations (refer ASX announcement 15 Dec 2022). Assay results from this first phase program are expected in mid-February 2023.

Drilling targeted the potential for either lithium mica and spodumene bearing pegmatites, or a new style of large tonnage hard rock lithium deposit hosted near the top of a large granite body rich in lithium micas (lepidolite) (Figure 2). Both target styles of lithium mineralisation are interpreted to extend under thin regolith cover at the Carbonate Hill prospect within the Turner River Project exploration licences (E45/6042, E45/6065). Similar types of lithium deposits have been located in WA and other countries, but are yet to be defined as major lithium projects in Australia.

The continuation of the RC drill program for a further 10 holes is about to recommence at Turner River, targeting nearby extensions of potential mineralisation.

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