Up to the end of 2021, the Penouta Project produced concentrates from tailings. During the second quarter of 2022, the Strategic Minerals consolidated the transition to open pit mining at the Penouta Project. The geology within the Penouta Project area is comprised of predominantly metamorphic rocks with minor deformed igneous rocks. An alkaline Granite (the Penouta Leucogranite) is the predominant host rock of cassiterite and tantalite ore. The metamorphic rocks are high grade metamorphic schists. Locally, there are two sets of fractures which are aligned north-south and east-west. It is thought the northsouth features are related to the regional fault network, whilst the east-west features are potentially related to the La Potrilla system of fractures. Emplacement of the Penouta alkaline granite is assumed to have occurred after the main deformational phases of the Variscan Orogeny (Díez Montes, 2006). Formation of the alkaline granite is thought to be the result of a combination of: a) the fractional crystallization of an evolved melt enriched in volatiles and rareelements; and b) strong metasomatism and hydrothermal alteration of an evolved two-mica granite. Cassiterite and columbite-tantalite are disseminated throughout the leucogranite; crystallisation of these minerals is thought to have occurred during a late magmatic event, probably as a consequence of albitisation. The muscovitisation, greisenisation, and silicification of the granitic cupola would have occurr ........

The Penouta Project was operational during the 1970s and focused on exploiting kaolinized leucogranite. Mining operations ceased in 1985 without proper habitat rehabilitation. In 2018, SMS reopened the mine as an advocate for modern, responsible and sustainable mining after building a new processing plant commissioned to work with tailings from previous operations. On January 25, 2022, the Company commenced open-pit production of tin and tantalum at its Penouta Project using soft rock from the top layer of the open pit, while awaiting an explosive permit to access hard rock contained in lower levels. In March 2022, the Company obtained the explosives permit and commenced explosive operations at the Penouta Project, which increased the production and quality of the Company’s final products. On May 23, 2022, the Company was granted the definitive concession of section C of the Penouta Project, consisting of 16 mining squares with an area of 155.8 hectares (the “Concession C Grant”), which allows the Company to fully develop the open pit mine to exploit cassiterite (tin), tantalum and niobium, and also to exploit the industrial minerals that exist in the mine, such as quartz, feldspars and micas for a 30 year term, which is renewable for up to 75 years. During the second quarter of 2022, the Company consolidated the transition to open pit mining at the Penouta Project and the commissioning of the new primary crushing plant.

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