28 October 2021 ASX Code: AGS No. of pages: 10 QUARTERLY REPORT - FOR THE PERIOD ENDED 3 0 SEPTEMBER 2021 DETAILS OF ANNOUNCEMENT ? Quarterly Activity Report for the period ended 3 0 September 2 02 1 ( 4 pages ) ? Appendix 5B for the period ended 3 0 September 2021 (5 p ages ) Authorised for release by the Board Bob Tolliday Company Secretary Further information relating to the Company and its various mining and exploration projects can be found on the Company’s website at www.allianceresources.com.au Suite 3, 51 - 55 City Road Southbank, VIC, 3006 P +61 3 9697 9090 F +61 3 9697 9091 email@example.com www.allianceresources.com.au ABN 38 063 293 336 QUARTERLY REPORT FOR THE PERIOD ENDED 3 0 SEPTEMBER 2021 QUARTERLY REPORT Alliance Resources Ltd - Quarterly Report for Period Ended 3 0 September 2021 1 3 0 September 2021 ASX Code: AGS QUARTERLY REPORT FOR THE PERIOD ENDED 3 0 SEPTEMBER 202 1 SUMMARY HIGHLIGHTS • An 9 hole, ~1550 metre diamond drill program commenced at the Wilcherry project to provide geotechnical information for the processing plant and provide valuable information of the potential depth extensions to the Weednanna ore shoots and core for research and geotechnical pur poses. • The Research Project with CSIRO to undertake analysis o f the Weednanna Au - Fe deposit genesis progressed during the September quarter with work on stage 1 nearing completion. This initial stage of the research centered on c haracterisation of the mine ralogy and geochronology of select sample s from Weednanna . • Mine design optimization work progressed significantly during the quarter with several optimized pit shells (Whittle 3D) generated for varying Au and Fe commodity prices. T he Weednanna processing p lant design detailed review is nearing completion with major components and long lead time items being selected and identified . • A regional exploration target review of the Wilcherry Hill tenements was completed identifying 174 targets, predominantly Iron, G old and Silver/Lead/Zinc. The review will be used to prioritise our ongoing regional exploration program at Wilcherry Hill. • Evaluation of alternative / Green energy solutions for the Weednanna project co ntinued with a Risk workshop undertaken to identify potential risks for the various power generation options being investigated. Detailed analysis of each power option is currently underway to determine the scale of infrastructure required to meet site demand, capital and operating costs, security of genera ting capacity and indicative costs for each option. Options assessed include PV (solar) with b attery storage, Wind generation, conventional diesel generation and combinations of all three options. • Travel r estrictions imposed due to the Covid - 19 virus conti nued to cause disruptions to corporate and exploration activities during the quarter. Commencement of the recent Diamond drilling program was delayed due to the inability of contractor personnel to access South Australia. Personnel continue to work remotel y from the c orporate office and access to South Australian exploration locations remains restricted due to interstate travel restrictions and quarantine requirements. • Cash reserves of $ 2.02 million a s at 3 0 September 20 2 1 . WILCHERRY PROJECT, SOUTH AUSTRALIA (100%) Weednanna Exploration • Following the validation of the regional database earlier in the year, a detailed review of the regional database was completed to identify and rank the 174 targets identified. The level of geological knowledge on each target ranges from conceptual (based on magnetics or gravity) to detailed resource (based on drilling) and will be used to plan future exploration programs at Wilcherry Hill. The region has historically been explored for base metals and iron over the past 2 decades, however the detailed review has identified Iron, Gold and Silver/lead/zinc targets with a QUARTERLY REPORT Alliance Resources Ltd - Quarterly Report for Period Ended 3 0 September 2021 2 further 32 conceptual structural and magnetic targets . This information will be used to plan our regional exploration program in coming years. • The diamond drilling program , originally planned for June , commenced during the quarter to provide diamond core for geotechnical evaluation for the mine and processing plant location and include s 1 deeper hole to test gold mineralisation extensions of the Weednanna resources, below the current Mineral Resource Estimate. • The next phase of exploration RC drilling i s planned, to commence in Q4 2021 to infill areas within the Weednanna resource where drill density is considered too wide and to test northern extensions to the resource between shoots 7, 8 and 3. Drilling around shoot 3 is designed to upgrade the resource from the inferred to indicated resource category, allowing this material to be included in the mine d esign and scheduling. • Rehabilitation of old exploration tracks and past drill programs continued during the quarter to comply with tenement requirement s . Weednanna Study W ork • The design of the Weednanna processing plant , completed during the last quarter i s currently being reviewed in detail to ensure the target metallurgical parameters will be achieved . Review and selection of major components and long lead time items is currentl y underway. • Detailed open pit design and cost analysis works for the Weednanna project c ontinued during the quarter with several open pit optimi s ation runs completed for gold and iron ore. Preliminary cost models were reviewed for each design, and various staged mining operations reviewed. Work will progress to the review of underground ore shoot s to determine potential mining mechanisms and the waste dump modelling . • Weather data collection is ongoing and the s urface hydrological modelling was completed d uring the quarter . Noise monitoring equipment was removed from site following sufficient data collected to update the historic site noise database. WEST AUSTRALIAN EXPLORATION Nepean Project (E15/1658) • No on - ground activities were undertaken during the quarter due to the focusing on completion of the Weednanna project evaluation, regional database validation work and rolling restrictions on interstate travel as a result of Covid - 19 . • The next phase of exp loration planned at the Project is aircore drilling to test for gold in regolith anomalism, which may be used as a vector towards a primary gold deposit . • An aboriginal heritage survey is planned at the Hawkesbury and Penrith prospects to provide clearance for the planned aircore drilling program in early 2022. This heritage survey is planned to be completed during October 2021. Kalgoorlie South Project (E26/208, P26/4460 - 63, P15/6389, & PLA26/4458 - 4459) • An aeromagnetic survey has been designed to collect hi gh resolution magnetic imagery over the northern area of the Kalgoorlie South Project. The survey area is constrained to the north by the Kalgoorlie Nickel Smelter and to the south by effective historic RAB and aircore drilling completed by Newcrest in 200 1 . QUARTERLY REPORT Alliance Resources Ltd - Quarterly Report for Period Ended 3 0 September 2021 3 TENEME NTS Tenement Name Location N a t u r e o f i n t e r e s t Beneficial percentage acquired or disposed of during the quarter Beneficial percentage held at end of quarter South Australia (Wilcherry Project) EL6379 Uno/Valley Dam 60 km northeast of Kimba G r a n t e d 0% 100% EL5875 Mount Miccollo 6 0 km north of Kimba G r a n t e d 0% 100% EL6475 Peterlumbo 40 km north of Kimba G r a n t e d 0% 100% EL5931 Maratchina Hill 35 km north of Kimba G r a n t e d 0% 100% EL6072 Eurila Dam 40 km northeast of Kimba G r a n t e d 0% 100% EL6188 Wilcherry Hill 4 0 km north of Kimba G r a n t e d 0% 100% EL 6521 Buckleboo West 60 km northwest of Kimba P e n d i n g 0% 10 0% Western Australia E15/1658 Nepean 6 5 km south west of Kalgoorlie G r a n t e d 0% 100% E15/1787 Nepean 65 km southwest of Kalgoorlie 0% 0% E 15/1788 Nepean 65 km southwest of Kalgoorlie 0 % 100 % P15/6591 Nepean 65km southwest of Kalgoorlie 0 % 10 0% E26/208 Kalgoorlie South 15 km south of Kalgoorlie P e n d i n g 0% 10 0% P15/6389 Kalgoorlie South 20 km south of Kalgoorlie P e n d i n g 0% 0% P26/4458 Kalgoorlie South 15 km south of Kalgoorlie P e n d i n g 0% 0% P26/4459 Kalgoorlie South 15 km south of Kalgoorlie P e n d i n g 0% 0% P26/4460 Kalgoorlie South 15 km south of Kalgoorlie 0% 100% P26/4461 Kalgoorlie South 15 km south of Kalgoorlie P e n d i n g 0% 10 0% P26/4462 Kalgoorlie South 15 km south of Kalgoorlie P e n d i n g 0% 10 0% P26/4463 Kalgoorlie South 15 km south of Kalgoorlie 0% 100% Kevin Malaxos Managing Director T: 03 9697 9090 E: firstname.lastname@example.org About Alliance Alliance Resources Ltd is an Australian gold and base metals exploration company with 100% owned projects in South Australia and Western Australia . The Company’s flagship project is the Wilcherry Project , located within the southern part of the Gawler Craton, approximately 45 km north of the township of Kimba, South Australia. The Mi neral Resource estimate for the Weednanna Gold Deposit, part of the Wilcherry Project, is 1. 106 Mt grading 4.3 g/t gold for 1 52 ,000 oz gold (classified 85 % Measured & Indicated and 1 5% Inferred). Refer to ASX announcement dated 9 November 20 20 for details concerning the Mineral Resource and the Competent Persons consent. The maiden iron resource for the Weednanna project was announced on 19 November 2020 and totals 1.15 Mt grading 59.4% Fe (classified as 65% Measured & Indicated and 35% inferred). Refer to ASX announcement dated 19 November 2020 for details concerning the Mineral Resource and the Competent Persons consent. QUARTERLY REPORT Alliance Resources Ltd - Quarterly Report for Period Ended 3 0 September 2021 4 Alliance is not aware of any new information or data that materially affects the information included in the above - mentioned announcement s . All material assumptions and technical parameters underpinning the above - mentioned Mineral Resource estimate s continue to apply and have not materially changed. An independent scoping study reported a positive outcome and sup ports a new, 250 ,000 tpa gold processing plant at Weednanna. Total indicative capital cost is approximately $44 million. Refer to ASX announcement dated 18 April 2019 for details concerning the scoping study including the above - mentioned financial informat ion. All material assumptions underpinning the above - mentioned financial information continue to apply and have not materially changed. There is potential to increase the size of this Mineral Resource with further drilling. Detailed Engineering design and Mine design studies have commenced to produce Detailed Feasibility Study (DFS) level designs and cost estimates for the Gold processin g plant and proposed open pit and underground mining operations. Alliance also owns an 80 person camp located on leased land in the township of Kimba which will be utilised during the construction phase and mining operations . Competent Persons The information in this report that relates to the Exploration Results is b ased on information compiled by Mr Anthony Gray. Mr Gray is a Member of the Australian Institute of Geoscientists and is a n employee of Alliance Resources Ltd. Mr Gray has sufficient experience which is relevant to the style of mineralisation and type of d eposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Gray consent s to the inclusion in the report of the matters based on their information in the form and context in which it appears. Rule 5.5 A SX Listing Rules Appendix 5B ( 17 / 07 / 20 ) Page 1 + See chapter 19 of the ASX Listing Rules for defined terms. Appendix 5B Mining exploration entity or oil and gas exploration entity quarterly cash flow report Name of entity ALLIANCE RESOURCES LIMITED ABN Quarter ended (“current quarter”) 38 063 293 336 3 0 September 202 1 Consolidated statement of cash flows Current quarter $A’000 Y ear to date ( 3 m on ths) $A’000 1 . Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) staff costs ( 2 79 ) ( 279 ) (e) administration and corporate costs ( 262 ) ( 262 ) 1. 3 Dividends received ( see n ote 3 ) 1. 4 Interest received 2 2 1. 5 Interest and other costs of finance paid 1. 6 Income taxes paid 1.7 Government grants and tax incentives 1. 8 Other (GST paid/recouped) 80 80 1. 9 Net cash from / (used in) operating activities ( 459 ) ( 459 ) 2. Cash flows from investing activities 2.1 Payments to acquire or for : (a) entities (b) tenements (c) property, plant and equipment (d) exploration & evaluation ( 954 ) ( 954 ) (e) investments (f) other non - current assets Appendix 5B Mining exploration entity or oil and gas exploration entity quarterly cash flow report A SX Listing Rules Appendix 5B ( 17 / 07 / 20 ) Page 2 + See chapter 19 of the ASX Listing Rules for defined terms. Consolidated statement of cash flows Current quarter $A’000 Y ear to date ( 3 m on ths) $A’000 2.2 Proceeds from the disposal of: (a) entities (b) tenements (c) property, plant and equipment (d) investments 90 90 (e) other non - current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see n ote 3 ) 2.5 Other 2.6 Net cash from / (used in) investing activities ( 864 ) ( 864 ) 3. Cash flows from financing activities 3.1 Proceeds from issues of equity securities (excluding convertible debt securities) 3.2 Proceeds from issue of convertible debt securities 3.3 Proceeds from exercise of options 3.4 Transaction costs related to issues of equity securities or convertible debt securities 3. 5 Proceeds from borrowings 3. 6 Repayment of borrowings 3. 7 Transaction costs related to loans and borrowings 3. 8 Dividends paid 3.9 Other (provide details if material) 3. 10 Net cash from / (used in) financing activities 4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of period 3,343 3,343 4.2 Net cash from / (used in) operating activities (item 1. 9 above) ( 459 ) ( 459 ) 4.3 Net cash from / (used in) investing activities (item 2.6 a bove) ( 864 ) ( 864 ) 4.4 Net cash from / (used in ) financing activities (item 3.10 above ) - - Appendix 5B Mining exploration entity or oil and gas exploration entity quarterly cash flow report A SX Listing Rules Appendix 5B ( 17 / 07 / 20 ) Page 3 + See chapter 19 of the ASX Listing Rules for defined terms. Consolidated statement of cash flows Current quarter $A’000 Y ear to date ( 3 m on ths) $A’000 4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period 2,020 2,020 5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts Current quarter $A’000 Previous quarter $A’000 5.1 Bank balances 1,900 3,223 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other - Term deposits and Performance Bonds 12 0 120 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above) 2,020 3,343 6 . Payments to related parties of the entity and their associates Current quarter $A'000 6 .1 Aggregate amount of payments to related parties and their associates included in item 1 187 6 .2 Aggregate amount of payments to related parties and their associates included in item 2 - Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments . All transactions involving Directors and associates were on normal commercial terms. These payments represent Director fees, Director consulting fees, re - imbursement of expenses and payments in terms of management service agreement with a Director related entity . Appendix 5B Mining exploration entity or oil and gas exploration entity quarterly cash flow report A SX Listing Rules Appendix 5B ( 17 / 07 / 20 ) Page 4 + See chapter 19 of the ASX Listing Rules for defined terms. 7 . Financing facilities Note: the term “facility’ includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity. Total facility a mount at quarter end $A’000 Amount drawn at quarter end $A’000 7 .1 Loan facilities - - 7 . 2 Credit standby arrangements - - 7 .3 Other (please specify) - - 7 .4 Total financing facilitie s - - 7 .5 Unused financing facilities available at quarter end - 7 . 6 Include in the box below a description of each facility above, including the lender, interest rate , maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well. 8 . Estimated cash available for future operating activities $A’000 8 .1 Net cash from / (used in) operating activities ( i tem 1.9) ( 459 ) 8.2 (Payments for exploration & evaluation classified as investing activities) ( i tem 2.1(d)) ( 954 ) 8.3 Total relevant outgoings ( i tem 8 . 1 + i tem 8.2 ) ( 1,413 ) 8 . 4 Cash and cash equivalents at quarter end ( i tem 4.6) 2,020 8 . 5 Unused finance facilities available at quarter end ( i tem 7 .5 ) - 8 . 6 Total available funding ( i tem 8 . 4 + i tem 8 . 5 ) 2,020 8 . 7 Estimated quarters of funding available ( i tem 8. 6 divided by i tem 8. 3 ) 1.4 8 . 8 Note: if the entity has reported positive relevant outgoings (ie a net cash inflow) in item 8.3, answer item 8.7 as “N/A”. Otherwise, a figure for the estimated quarters of funding available must be included in item 8.7. I f i tem 8 . 7 is less than 2 quarters, please provide answers to the followi ng questions: 8.8. 1 Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not? Answer: Yes 8.8.2 Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful? Appendix 5B Mining exploration entity or oil and gas exploration entity quarterly cash flow report A SX Listing Rules Appendix 5B ( 17 / 07 / 20 ) Page 5 + See chapter 19 of the ASX Listing Rules for defined terms. Answer: The entity proposes to raise new equity through a capital raising in due course. The major shareholder companies associated with the director Mr Ian Gandel, namely Gandel Metals Pty Ltd and Abbotsleigh Pty Ltd , currently collectively own 72.18 % of the issued capital of the entity and have committed to participate in any capital raisings fo r the next 12 months , thus providing the entity with a solid platform to raise sufficient capital to continue to fund its operations. This commitment, coupled with the entity’s history of successfully raising funds, plus the fact that the top 20 sharehold ers own in excess of 90% of the entity’s issued capital leads the Board of Directors to believe any capital raising will be successful. . 8.8.3 Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis? Answer: The entity does expect that it will be able to continue its operations and to meet its business objectives based on the entity’s expectations to raise capital as detailed in Answer 8.8.2 above Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2 and 8.8.3 must be answered. Compliance statement 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A . 2 This statement give s a true and fair view of the matters disclosed . Date: 2 8 October 2021 Authorised by: T he B oard (Name of body or officer authorising release – see note 4 ) Notes 1 . Th is quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity’s activities for the past quarter , how they have been financed and the effect this has had on its cash position. An entity that w ishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so. 2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, t he definitions in, and prov isions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 10 7 : Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report . 3 . Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities , depending on the accounting policy of the entity . 4. If th is report has been authorised for release to the market by your board of directors, you can insert here: “By the board”. If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the [ name of board committee – eg Audit and Risk Committee ] ”. If it has been authorised for release to the market by a disclosure commi ttee, you can insert here: “By the Disclosure Committee”. 5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations , the board should have receiv ed a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been proper ly maintained , that this report complies with the appropriate accounting standards and give s a true and fair view of the cash flows of the entity , and that the ir opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively .