URU Metals : Annual Report 2022

URU METALS LIMITED: 2022 ANNUAL REPORT

URU METALS LIMITED

2022 ANNUAL REPORT

URU Metals Limited

Company Information

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URU Metals Limited

Chairman's Statement

For the Year Ended 31 March 2022

I am pleased to present to our shareholders and stakeholders the consolidated financial statements of the Group for the year ended 31 March 2022.

In August 2021, URU successfully completed the disposal of the Zebediela Nickel Project ("Project") to Zeb Nickel Corp. (TSX-V: ZBNI) and the Project remains the primary focus of URU, through its 74.82% interest in Zeb Nickel Corp. and URU's continuing role as the technical operator of the Project.

The year under review saw the completion of the 8-hole Phase 2 diamond drilling exploration program which aimed to identify the extent of nickel-copper-PGE mineralisation in the footwall of the historical nickel resource. The drilling program confirmed both the grade and continuity of the nickel mineralisation, as well as the presence of higher-grade Ni- PGE bearing Critical Zone lithologies on the project area. The drilling also resulted in the discovery of a new high-grade gold zone on the project area, as reported in the Press Release dated 12 April 2022.

The discovery of the gold mineralisation now means there are three known different styles and zones of mineralisation within the project area, namely the nickel mineralisation in Lower Zone lithologies, the Ni-PGE mineralisation associated with Critical Zone lithologies, and lastly, the newly discovered gold mineralisation. Furthermore the project has the correct geology to host massive sulphide Ni-Cu-PGE mineralisation.

The Group's technical team has adopted a new exploration approach based on a thorough review of all available data. Historical drilling was largely focused on defining the nickel resource in the Lower Zone lithologies, and consequently, many of these historical holes stopped short of intersecting the lithologies that host the Ni-PGE mineralisation found in Critical Zone rocks, as well as any potential gold mineralisation. Based on the exploration successes in Phase 1 of this drill program, the technical team made the decision that Phase 2 holes should all be drilled into the Penge Iron Formation to test for Ni-PGE mineralisation in footwall rocks of any Critical Zone lithologies present on the project area. This policy has resulted in numerous intersections of Ni-PGE mineralisation in Critical Zone rocks which was not previously identified in historical drilling, as well as the new gold discovery.

The Group remains bullish on the nickel price, based on the anticipated demand for Class I nickel in battery applications. The presence of PGE mineralisation on the project area bodes well for improving the overall project economics, and the Group anticipates a prolonged strong demand for PGE's in their traditional use in autocatalysts and industrial applications, as well as an increasing demand for their use in hydrogen fuel cells.

The Group is of the view that the Zeb Project is well de-risked due to the latest round of drilling proving that Critical Zone rocks are present on the Project area, and all that remains is further drilling to simply define the higher-grade areas of this horizon and ultimately declare a resource on these Critical Zone lithologies. This in turn will pave the way for the Group to produce an updated Preliminary Economic Assessment, which is expected to show improved project economics.

Furthermore, the Group is anticipating that the South Africa Department of Mineral Resources and Energy will shortly be issuing a Mining Right over the Project area, which will secure the mineral tenure of the Project for a further 30 years.

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URU Metals Limited

Chairman's Statement (continued)

For the Year Ended 31 March 2022

Financial Review

The Group recorded an audited loss after tax for the year to 31 March 2022 of $1.50 million (2021: loss of $651k). The

loss per share from continuing activities was 0.91¢ (2021: 0.44¢).

The Group's exploration activities during the financial year under review were funded through existing cash resources as well as the issue of shares by Zeb Nickel Corp. raising $2.8 million CAD. We ended the financial year with cash and cash equivalents of $1.62 million (2021: $99k).

Jay Vieira

Non-executive Chairman

30 January 2023

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