Company Announcements

30 September 2024

East Star Resources Plc

("East Star" or the "Company")

Half Year Report for the Six Months Ended 30 June 2024

-  Company Update

East Star Resources Plc (LSE:EST), which is exploring for copper in Kazakhstan, is pleased to present its half year report for the six month period ended 30 June 2024.

Operational Highlights - 3 Geological Copper Strategies 

VMS Copper - Rudny Altai Belt

·    Announced in April 2024 the publication of a maiden JORC Inferred Mineral Resource for the Verkhuba Copper Deposit of 20.3Mt @ 1.16% copper, 1.54% zinc and 0.27% lead using a whole deposit cutoff grade of 0.86% copper equivalent

·    Announced in April 2024 the initiation of a formal process following third-party interest including opening a data room for a potential joint venture, farm-out, or sale of Verkhuba

o  Further to the last update on 4 July 2024, while the Board continues discussions with interested parties, including recent new inbound interest, it has in addition determined that the Company can add significantly more value to the asset and attract additional partner and finance interest by advancing the resource, metallurgical test work, mine planning, and approvals, demonstrating its low cost development potential and so intends on progressing the project

Copper Porphyry - Balkash-Ili Volcanic Arc

·    Announced in January 2024 a grant of US$0.5 million under the 2024 BHP Xplor programme to initiate a copper porphyry exploration strategy in Kazakhstan

o  Awarded first copper porphyry exploration licence (Ayagoz) in February 2024 - 79 km² tenement with a 3km long silica lithocap located ~80km north of the large Aktogay copper mine (~2.5Bt @ 0.39% copper)

o  Awarded second copper porphyry exploration licence (Snowy) in March 2024 - 121 km² tenement, with a 6km long and 3km wide silica lithocap, located ~150km north of the large Kounrad copper mine and smelter (~800Mt @ 0.62% copper and up to 0.76g/t gold)

§ Conducted extensive soil sampling and spectral analysis of samples taken from both licences - analysis ongoing

Sediment-hosted Copper 

·    Announced in February 2024 a joint venture agreement with Getech Group Plc (AIM: GTC), a world-leading locator of subsurface resources, to explore for sediment-hosted copper deposits in Kazakhstan - analysis ongoing

Corporate Highlights

·    Chris van Wijk, a geologist who developed the porphyry exploration strategy with East Star, joined the Board in January 2024 and became Technical Director in February 2024

·    David Minchin stood down from his position as a Non-Executive Director in May 2024 due to his other business commitments

Sandy Barblett, Non-Executive Chairman, commented:

"Kicking off the year with an endorsement and grant from BHP Xplor was a major catalyst for the Company as we were one of only six successful selectees from more than 500 applications. We've grown bigger in terms of people  and targets and undoubtably the Company's prospects have improved dramatically as a result of this programme. We're enormously grateful to BHP for the opportunity, their wisdom and their support. The Company now has a three-pronged copper strategy, pursuing infrastructure-led VMS deposits, as well as Tier 1 porphyry and sediment-hosted copper deposits. The Company has refined its focus to copper - a strategic transition metal which is facing a medium and long term supply deficit and is the subject of recent M&A actions by global majors. New sources of supply are urgently needed, and Kazakhstan is perfectly positioned to contribute. East Star has over the past couple of years positioned itself as a go-to explorer, with boots on the ground, for accessing this opportunity in Kazakhstan. 

Activity in the first half was dominated by executing the BHP Xplor programme and its associated learnings, undertaking significant initial fieldwork on the porphyry licences, delivering a maiden JORC copper resource at Verkhuba and positioning the Company to capture the maximum value from that Verkhuba asset in due course.

Through the period, the Company continued regional exploration on the Rudny Altai VMS licences and conducted additional desktop work and geological field work on Verkhuba. We believe we can add significantly to the value of Verkhuba by increasing confidence in, and potentially growing, the resource, and understanding of the economics by conducting scoping and pre-feasibility studies.

Having been active in the field over the summer, our attention is turning to forthcoming high-impact drilling on new VMS targets in addition to further drilling at Verkhuba. Further success on this prolific belt with its existing infrastructure and low economic threshold would add more assets which are amenable to a 'quick-to-market' development at a time when copper is in high demand. We look forward to a busy second half of the year."

East Star Resources Plc

Alex Walker, Chief Executive Officer

Tel: +44 (0)20 7390 0234 (via Vigo Consulting)

SI Capital (Corporate Broker)

Nick Emerson

Tel: +44 (0)1483 413 500

Peterhouse Capital Limited (Corporate Broker)

Peter Greensmith

Tel: +44 (0) 20 7469 0930

Vigo Consulting (Investor Relations)

Ben Simons / Peter Jacob

Tel: +44 (0)20 7390 0234

About East Star Resources Plc

East Star Resources is focused on the discovery and development of copper and other strategic minerals required for the energy revolution. With eight licences covering >1,000 km² in three mineral rich districts of Kazakhstan, East Star is undertaking an intensive exploration programme, applying modern geophysics to discover minerals in levels that were not previously explored. East Star's most advanced project is a copper deposit on the world-class Rudny Altai VMS Belt where the Company delivered a JORC compliant inferred resource of 20.3Mt @ 1.16% copper, 1.54% zinc and 0.27% lead close to infrastructure, within trucking distance of third-party mills with excess capacity. East Star's management are based permanently on the ground, supported by local expertise, and a joint venture with the state mining company on certain projects. In 2024, East Star was selected to receive grant funding through the BHP Xplor programme for copper porphyry exploration.

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www.eaststarplc.com

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The person who arranged for the release of this announcement was Alex Walker, CEO of the Company.

This announcement contains inside information for the purposes of Article 7 of Regulation 2014/596/EU which is part of domestic UK law pursuant to the Market Abuse (Amendment) (EU Exit) Regulations (SI 2019/310) ("UK MAR"). Upon the publication of this announcement, this inside information (as defined in UK MAR) is now considered to be in the public domain.

CHAIRMAN'S STATEMENT

Introduction

I am pleased to present the half year report for the six months ended 30 June 2024 (the "Period").

During the Period, East Star continued to develop its strategy to unlock the copper potential of Kazakhstan, a metal which has soared in value due to looming supply shortages. The Company now has three copper exploration strategies in play:

·    Volcanogenic Massive Sulphide ("VMS") copper including the discovery of the Verkhuba Deposit with a maiden JORC Mineral Resource Estimate ("MRE") of 20.3Mt @ 1.16% copper, 1.54% zinc and 0.27% lead in an infrastructure-rich region, amenable to a low capex development

·    Copper porphyry exploration (supported in the Period by BHP Xplor), targeting multiple opportunities to discover a tier 1 deposit

·    Sediment-hosted copper through an initial targeting partnership with Getech at no cost to East Star

In the Board's opinion, your Company could not be targeting a better metal in a better country than copper in Kazakhstan at this time. The anticipated global supply deficit has slowed from recent investment bank predictions of a significant shortfall in 2024; however, the outlook remains extremely robust with demand vastly outstripping supply in the medium to long term. Majors are hunting for, and building, more copper exposure, and only new discoveries in viable jurisdictions can address this imbalance at scale. We believe Kazakhstan will be a leader among those emerging jurisdictions, with its vast mineral endowment, low operating costs, proximity to Europe and Asia, and supply relationships with the EU and UK.

East Star has over the past couple of years, accelerated by the BHP Xpor programme in the Period, positioned itself as a go-to explorer, with boots on the ground, for accessing this opportunity in Kazakhstan. 

Review of Operations

VMS Copper

Verkhuba Copper Deposit

Having established the target from nearly 47,000 metres of historical drilling, followed by our own drilling in 2023, in March 2024, we were able to instruct independent experts, AMC Consultants, to produce a maiden JORC Inferred Mineral Resource Estimate ("MRE") for the Verkhuba Copper Deposit. This resulted in the publication in April 2024 of the MRE comprising 20.3Mt @ 1.16% copper, 1.54% zinc and 0.27% lead using a whole deposit cutoff grade of 0.86% copper equivalent. The publication of the MRE represented a significant milestone for East Star. In a little over a year and one exploration season, we had transformed a historical copper deposit into a large JORC Inferred Mineral Resource in an infrastructure-rich region. From that point, the Company became underpinned not only by its highly prospective exploration licences but by a significant critical metal asset in the ground with further upside potential. At over 20Mt, Verkhuba is already in the top third of this style of VMS deposit globally. With copper at around $9,000 per tonne and the prospect of a low capex development, we believe Verkhuba to hold considerable value.

Others shared our view and third-party interest in Verkhuba emerged in the Period, triggering our initiation of a formal process including the opening of a data room for a potential joint venture, farm-out, or sale of the deposit.

While companies remain in the data room, we believe we can add significantly to the value of Verkhuba by increasing confidence in, and potentially growing, the resource, and understanding of the economics by conducting scoping and pre-feasibility studies.

Although the process and some associated discussions remain ongoing, for now the Company remains the sole operator of the future work programme for 2024 to progress the open pit development concept through to a stage where economic feasibility can be demonstrated.

Other VMS Targets

Elsewhere on our Rudny Altai VMS belt licences, since the summer our exploration team, led by Exploration Manager Tremain Woods, has been helping better define our geology and refine numerous targets to a drillable number in a forthcoming programme. Multiple copper occurrences have been observed - all a short distance from the historical Nikolaevsky deposit (40Mt @ 2.4% copper, 3.2% zinc, and 1.1 g/t gold) - which are well served by infrastructure. Some 48 targets have been assessed and ranked, with high-impact drilling expected to occur on at least three new VMS targets this year in addition to further drilling at Verkhuba.

Copper Porphyry

Grant from BHP Xplor for Copper Porphyry Exploration on the Balkash-Ili Magmatic Arc

We were delighted to announce in January 2023 that East Star had been selected to receive a grant of US$0.5 million through the 2024 BHP Xplor programme to initiate a copper porphyry exploration strategy in Kazakhstan. We are extremely proud that BHP chose to work with East Star and provide non-dilutive grant funding to look for major new copper porphyry deposits in the region. Porphyry deposits are the primary deposit style for copper production globally and Kazakhstan is host to several exceptional but significantly underexplored regions that contain world-class copper porphyry mines.

In February 2024, we were awarded our first copper porphyry exploration licence (Ayagoz)  a 79 km² tenement with a 3km long silica lithocap located ~80km north of the large Aktogay open pit copper mine (~2.5Bt @ 0.39% Cu).

In March 2024, we were awarded a second copper porphyry exploration licence (Snowy) - a 121 km² tenement with a 6km long and 3km wide silica lithocap, located ~150km north of the large Kounrad open pit copper mine and smelter (~800Mt @ 0.62% Cu and up to 0.76g/t Au). The licence shows historical soil anomalism indicating its potential prospectivity for a copper porphyry deposit.

During the Period, the Company undertook extensive soil sampling and spectral analysis of 2,800 samples taken from the Ayagoz and Snowy licences. We were really impressed with the speed and quality of the work our team and contractors had completed. When combined with the geochemistry results, we will have a detailed map of the area, inferring the depth of the porphyry target. The soils will also assist with the assessment of the historical artisanal gold mines around Snowy and their potential to contain larger epithermal gold deposits. The geochemical results from these two programmes will dictate the follow-on work programme and provide information that will assist in targeting throughout the rest of this proven mineral belt.

Sediment-Hosted Copper Exploration JV with Getech

In February 2024, we announced that we had entered into a joint venture agreement with Getech, a world-leading locator of subsurface resources, to explore for sediment-hosted copper deposits in Kazakhstan, which already hosts one of the world's largest such deposits in Dzhezkazgan (22Mt contained copper). The JV is being conducted through a wholly owned East Star subsidiary established specifically for this purpose. At no upfront cost to East Star, this play-type added a third geological strand to East Star's copper exploration strategy in addition to VMS and porphyry. The Getech partnership combines proprietary datasets and basin analysis capabilities with East Star's sediment-hosted copper exploration expertise and capabilities. The results of analysis are pending. Once completed, fieldwork will be undertaken by the Company before any initial licence applications are made.

Board Changes

Alongside the BHP Xplor grant, we were pleased to announce the appointment of Chris van Wijk initially as a Non-Executive Director and subsequently in February 2024 as the Technical Director of the Company. Mr van Wijk is an experienced geologist who specialises in project evaluation and project generation and developed the porphyry exploration strategy with East Star. He brings a wealth of relevant experience, including base metal and gold exploration in Africa, Europe, the Americas, and Australia as well as joint venture management and project evaluation for major mining companies including BHP, IAMGOLD, First Quantum Minerals and Fortescue Metals Group. Mr van Wijk's technical expertise is a valuable addition to our Board and exploration portfolio. He brings outstanding geological pedigree, particularly regarding sediment-hosted copper and porphyry exploration which, when paired with East Star's proven ability to efficiently and effectively execute exploration in Kazakhstan, will take the Company to the next level.

In May 2024, David Minchin decided not to stand for re-election as a Non-Executive Director of the Company at the Annual General Meeting ("AGM") due to his other business commitments. Accordingly, he retired as a director with effect from the AGM. East Star wishes to thank Mr Minchin for his valuable contribution over the last two years as the Company has listed on the London Stock Exchange and made significant progress as a copper explorer in Kazakhstan.

Key Financial Indicators

·    Cash and cash equivalents at period end were £411,000

·    Profit before taxation for the period was £9,000

·    The Group held net assets at period end of £2,891,000

Outlook

Kicking off the year with an endorsement and grant from BHP Xplor was a major catalyst for the Company as we were one of only six successful selectees from more than 500 applications. We've grown bigger in terms of people and targets and undoubtably the Company's prospects have improved dramatically as a result of this programme. We're enormously grateful to BHP for the opportunity, their wisdom and their support.

Having been active in the field over the summer, our attention is turning to forthcoming high-impact drilling on new VMS targets. Further drilling is also expected to occur at Verkhuba as we progress the open pit development concept through to a stage where economic feasibility can be demonstrated as a precursor to a mining licence.  

Further success on this prolific belt with its existing infrastructure and low economic threshold would add more assets which are amenable to a 'quick-to-market' development at a time when copper is in high demand. We look forward to a busy second half of the year.

Sandy Barblett

Non-Executive Chairman

30 September 2024