NMI.V · 2021-05-20 12:00:00

Mineral Resource Update: More than 650 Percent Increase in Measured and Indicated TREO Mineral Resources for the Lofdal Heavy Rare Earths Project

Resource Estimates

Press Release

Namibia Critical Metals Inc.

Mineral Resource Update: More than 650 Percent Increase in

Measured and Indicated TREO Mineral Resources for the Lofdal

Heavy Rare Earths Project

Halifax, Nova Scotia May 20, 2021 – Namibia Critical Metals Inc. (“Namibia Critical Metals”

or the “Company” or “NMI” ) (TSXV:N MI) is pleased to announce an updated NI 43-101

mineral resource estimate for the Lofdal Heavy Rare Earths Project (“Lofdal”) in northwestern

Namibia.

Highlights of the mineral resource update include:

• 1454% increase in total Measured and Indicated Mineral Resource tonnage from 2.88

Mt at 0.32% TREO to 44.76 million tonnes at 0.17% TREO for combined Area 4

(including the first Measured Resource for Lofdal) and Area 2B based on the same cut-

off of 0.1 % TREO as in the previous PEA filed on October 1, 2014;

• Term 1 objectives with JV partner JOGMEC of doubling the mineral resource far

exceeded;

• 164% increase in total Inferred Mineral Resource tonnage to 8.67 million tonnes at a

grade of 0.17% TREO for combined Area 4 and Area 2B based on 0.1 % TREO cut-

off;

• 6 times increase in contained TREO in Measured & Indicated categories to 76,950

tonnes;

• Compared to previous mineral resource estimate, contained dysprosium oxide (4,060

tonnes) and terbium oxide (620 tonnes) in the Measured and Indicated categories

increased 6.1 times and 6.7 times, respectively;

• Dysprosium oxide price in the “moderate down case scenario ” for 2021 at 420 USD

per kilogram and terbium oxide price at 1,125 USD per kilogram (Adamas Intelligence,

2021)

Darrin Campbell, Preside nt of NMI stated “We are extremely pleased to see this significant

increase to the size and potential of our Lofdal Project. Our first year in partnership with

JOGMEC has been a great success in advancing Lofdal forward to being one of the premier

heavy rare earth projects in the world. It is a great pleasure to see that our geological team

has cracked the code of the deposit to establish a first significant mineral resource outside

Area 4 at Area 2B with several tens of kilometers of additional strike length of potentially

mineralised structural zones to be drilled in Area 2 and Area 5 that could result in additional

mineral resources. The main value drivers of the Lofdal deposit are dysprosium and terbium

which are critical components to produce high-strength permanent magnets used in electric

vehicle motors and wind turbines. The permanent magnet sector is expected to be the fastest-

growing end-use category of rare earths for the next decade.”

Background and summary

The Lofdal deposit is being developed by a joint venture of Namibia Critical Metals and the

Japanese Oil, Gas and Metals Corporation (JOGMEC). The joint venture aimed at doubling the

Mineral Resource of 2.88 Mt at a grade of 0.32% TREO in the Indicated category and 3.28 Mt

at a grade of 0.27% TREO in the Inferred category (as reported in the PEA 20141) with its 9

months drilling campaign in 2020.

Figure 1 – Structural zones of the central Lofdal deposit with the first two areas with resource drilling:

Area 2B and Area 4 (drill collars as green triangles).

As a result, drilling in 2020 increased the mineral resources of the project to 44.76 Mt at a

grade of 0.17% TREO Measured and Indicated categories and 8.67 Mt at a grade of 0.17%

TREO in Inferred category in combined Area 4 and Area 2B (see Figure 1), applying the same

cut-off of 0.1% total rare earth oxides (TREO) as in the previous PEA of 2014.

1 Preliminary Economic Assessment on the Lofdal Rare Earths Project Namibia dated October 1, 2014 authored by

David S. Dodd, B. Sc (Hon) FSAIMM - The MDM Group, South Africa, Patrick J.F. Hannon, M.A.Sc., P.Eng. and

William Douglas Roy, M.A.Sc., P.Eng. - MineTech International Limited, Canada, Peter Roy Siegfried, MAusIMM

(CP Geology) and Michael R. H all, B.Sc (Hons), MBA, MAusIMM, Pr.Sci.Nat, MGSSA - The MSA Group, South

Africa. The PEA should not be considered to be a pre -feasibility or feasibility study, as the economics and technical

viability of the Project has not been demonstrated at this time. The PEA is preliminary in nature and includes Inferred

Mineral Resources that are considered too speculative geologically to have the economic considerations applied to

them that would enable them to be categorized as Mineral Reserves. Furthermore, there i s no certainty that the PEA

will be realized.

On April 1, 2021 the Company announced that JOGMEC had officially elected to move to Term

2 of the JV Agreement and provide additional funding of $2,063,000 for further exploration

and development programs at Lofdal through to July 31, 2021.

The terms of the JOGMEC JV Agreement contemplate that JOGMEC provides $3,000,000 in

Term 1 and $7,000,000 in Term 2 to earn a 40% interest in the Lofdal project. Term 3 calls

for a further $10,000,000 of expenditures to earn an additional 10% interest. The total

approved expenditures to date for Terms 1 and 2 are $6,163,000. The JV Agreement is

structured such that no NMI equity will be issued and it is totally non -dilutive to NMI

shareholders.

Mineral Resource Estimates

The in-situ Mineral Resource estimate was independently prepared by T he MSA Group of

South Africa (”MSA”) and was based on geochemical analyses and density measurements of

core samples obtained by diamond drilling undertaken by Namibia Critical Metals from 2010

to 2012, 2015 and more recently in 2020.

A total of 172 drill holes have been drilled at Area 4, of which 13 were collared outside the

defined Mineral Resource. In Area 2B, 46 drill holes were used to estimate the Mineral

Resource. Extensive trenching and trench sampling were conducted in the earlier years of

exploration, which was useful in defining the extents of the mineralisation but was excluded

from the grade estimates due to potential biases from sampling in the nea r surface

environment.

From the ass umed parameters a 0.1% TREO cut -off grade was calculated, which together

with the Whittle optimised pit shell demonstrates reasonable prospects for eventual economic

extraction (RPEEE) for the Mineral Resource. The Mineral Resource is classified into the

Measured, Indicated and Inferred categories and is reported at a cut-off grade of 0.1% TREO

(TREO and *TREO in tables below refers to Total Rare Earth Oxides including Y 2O3).

The mineral resource was estimated by MSA as follows:

Table 1: Area 4 Mineral Resources Estimate for 0.1% TREO cut-off

Notes:

1. All tabulated data have been rounded and as a result minor computational errors may occur.

2. Mineral Resources, which are not Mineral Reserves, have no demonstrated economic viability.

3. *TREO = Total Rare Earth Oxides and includes Y2O3

4. **HREO = Total Heavy Rare Earth Oxides and includes Y2O3

5. ***LREO = Total Light Rare Earth Oxides

Area 4 Mineral Resource Estimate above 0.1% TREO* cut-off grade

Tonnes TREO* HREO** LREO*** Dy2O3 TREO*

(Mt) % % % ppm (kt)

Measured 5.93 0.21 0.14 0.07 138 12.71

Indicated 36.63 0.16 0.08 0.08 82 59.97

Measured &

Indicated 42.57 0.17 0.09 0.08 90 72.68

Inferred 6.09 0.17 0.07 0.09 72 10.12

Category

Table 6: Area 2B Grade and Tonnages in Inferred category

Cut-off

TREO %

Tonnes

(Mt)

TREO* HREO** LREO** Dy2O3

ppm

TREO

% % % (kt)

0.10 2.58 0.19 0.09 0.09 92 4.8

0.15 1.37 0.24 0.13 0.11 123 3.3

0.20 0.67 0.31 0.17 0.14 168 2.1

0.25 0.45 0.36 0.20 0.16 196 1.6

0.30 0.31 0.39 0.23 0.16 226 1.2

0.35 0.20 0.43 0.29 0.14 274 0.9

0.40 0.11 0.47 0.34 0.13 324 0.5

Table 7: Area 4 Mineral Resources estimate by individual REO – Grades at a cut-off of 0.1% TREO

Class

Tonnes TREO* La2O3 Ce2O3 Pr2O3 Nd2O3 Sm2O3 Eu2O3 Gd2O3 Tb2O3 Dy2O3 Ho2O3 Er2O3 Tm2O3 Yb2O3 Lu2O3 Y2O3

Mt % ppm ppm ppm ppm ppm ppm ppm ppm ppm ppm ppm ppm ppm ppm ppm

Measured 5.93 0.21 177 320 34 127 44 19 85 20 138 30 86 13 78 11 960

Indicated 36.63 0.16 208 371 39 139 40 15 62 13 82 17 49 7 44 6 546

M&I 42.57 0.17 204 364 38 137 41 16 65 14 90 19 54 8 48 7 603

Inferred 6.09 0.17 247 436 45 158 41 14 54 11 72 15 45 7 41 6 470

Table 8: Area 4 Mineral Resources estimate by individual REO – Tonnes at a cut-off of 0.1% TREO

Class

Tonnes TREO* La2O3 Ce2O3 Pr2O3 Nd2O3 Sm2O3 Eu2O3 Gd2O3 Tb2O3 Dy2O3 Ho2O3 Er2O3 Tm2O3 Yb2O3 Lu2O3 Y2O3

Mt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt

Measured 5.93 12.71 1.05 1.90 0.20 0.75 0.26 0.11 0.51 0.12 0.82 0.18 0.51 0.08 0.46 0.07 5.69

Indicated 36.63 59.97 7.62 13.58 1.42 5.09 1.48 0.56 2.26 0.46 3.01 0.62 1.78 0.26 1.60 0.23 19.99

M&I 42.57 72.68 8.67 15.48 1.62 5.84 1.74 0.67 2.76 0.58 3.83 0.80 2.30 0.34 2.06 0.30 25.68

Inferred 6.09 10.12 1.50 2.65 0.28 0.96 0.25 0.08 0.33 0.07 0.44 0.09 0.27 0.04 0.25 0.04 2.86

Table 9: Area 2B Mineral Resource estimate by individual REO – Grades at a cut-off of 0.1% TREO

Class

Tonnes TREO* La2O3 Ce2O3 Pr2O3 Nd2O3 Sm2O3 Eu2O3 Gd2O3 Tb2O3 Dy2O3 Ho2O3 Er2O3 Tm2O3 Yb2O3 Lu2O3 Y2O3

Mt % ppm ppm ppm ppm ppm ppm ppm ppm ppm ppm ppm ppm ppm ppm ppm

Indicated 2.20 0.19 255 398 41 161 64 25 87 17 104 20 58 8 54 8 638

Inferred 2.58 0.19 243 385 41 178 85 29 94 16 92 17 49 7 45 7 575

Table 10: Area 2B Mineral Resource estimate by individual REO - Tonnes at a cut-off of 0.1% TREO

Notes:

1. All tabulated data have been rounded and as a result minor computational errors may occur.

2. Mineral Resources, which are not Mineral Reserves, have no demonstrated economic viability.

3. *TREO = Total Rare Earth Oxides and includes Y2O3

Class

Tonnes TREO* La2O3 Ce2O3 Pr2O3 Nd2O3 Sm2O3 Eu2O3 Gd2O3 Tb2O3 Dy2O3 Ho2O3 Er2O3 Tm2O3 Yb2O3 Lu2O3 Y2O3

Mt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt

Indicated 2.20 4.27 0.56 0.88 0.09 0.35 0.14 0.05 0.19 0.04 0.23 0.04 0.13 0.02 0.12 0.02 1.41

Inferred 2.58 4.80 0.63 0.99 0.11 0.46 0.22 0.08 0.24 0.04 0.24 0.04 0.13 0.02 0.12 0.02 1.48

Interpretation of the Mineral Resource estimates

The Mineral Resource at Area 4 was increased more than 7 fold using a cut-off of 0.1% TREO

as in the maiden resource of 201 2. In addition to Area 4, drilling in 2020 also demonstrated

the potential of other mineralised structures to form part of the Lofdal deposit. Mineral

resources at Area 2B amount to 2.2 Mt in the Indicated category and 2.58 Mt in the Inferred

category at a cut -off of 0.1% TREO , or 1.24 Mt and 1.37 Mt, respectively, at a cut-off of

0.15% TREO. The exploration target for Area 2B was originally estimated at 1.5-2.5 Mt, and

thus, was significantly exceeded.

Table 11: Comparison of Lofdal Mineral Resource Estimates of 2012 and 2021

Year of Mineral Resource Estimate 2012 2012 2021 2021

Cut-off grade 0.1% TREO 0.1% TREO 0.1% TREO 0.1% TREO

Million tonnes

(Mt)

Grade

%TREO

Million tonnes

(Mt)

Grade

%TREO

Measured Resource Area 4 0 - 5.93 0.21

Indicated Resource Area 4 2.88 0.32 36.63 0.16

Indicated Resource Area 2B 0 - 2.20 0.19

Total Measured & Indicated Resources 2.88 0.32 44.76 0.17

Inferred Resource Area 4 3.28 0.27 6.09 0.17

Inferred Resource Area 2B 0 - 2.58 0.19

Total Inferred Resources 3.28 0.27 8.67 0.17

The Mineral Resource estimates underline the potential of the Lofdal deposit to be developed

in large-scale. Initial XRT and XRF sorting test work demonstrated an increase in the grade

of the run of mine material by a factor of 1.5 to 3.0 (press release December 3 rd, 2020)

without any optimization . The Company plans substantial additional test work on sorting

technologies to allow for a low cut-off grade in the range of 0.1% TREO.

Compared to the previous Mineral Resource estimate, the contained dysprosium oxide (4,060

tonnes) and terbium oxide (620 tonnes) in the Measured and Indicated categories increased

6.1 times and 6.7 times, respectively (table 12).

Table 12: Comparison of contained dysprosium oxide and terbium oxide in Mineral Resources of 2012

and 2021

Year of Resource Estimate 2014 2021 2014 2021 2014 2021

TREO TREO Dy2O3 Dy2O3 Tb2O3 Tb2O3

tonnes tonnes tonnes tonnes tonnes tonnes

Measured Resources 0 12,710 0 820 0 120

Indicated Resources 9,234 59,970 664 3,240 93 500

Measured&Indicated 9,234 72,680 664 4,060 93 620

Inferred Resources 8,973 10,120 631 680 88 110

Geological background

The rare earth element (“REE”) mineralisation at Lofdal comprises multiple zones of

hydrothermal alteration, predominantly albiti zation and carbonatization, associated with

narrow carbonatite dykes of variable thickness. Multiple zones of REE mineralisation occur at

Lofdal, with the two locations that have been evaluated by recent drilling being known as Area

4 and Area 2B.

At Area 4, the zone of alteration has been traced for over more than 1,100 m at surface

(figure 1), where it is characterised by an intensely altered zone of 15 m to 30 m thickness

with a less altered halo of 50 m to 60 m that can extend up to 100 m in thickness (figure 2).

Figure 2: Section through block model of central part of Area 4displaying HREO block grades

The alteration zone at Area 2B has been traced along a strike length of 600 m and its thickness

ranges from 20 m to 35 m, thinning to less than 10 m in the central part of the deposit (figure

3). Regional sampling and mapping suggest that the mineralisation for both deposits may

extend for several kilometers along strike.

Figure 3: Section through block model of western part of Area 2B displaying TREO block grades

Sampling and Mineral Resource estimation techniques

The Mineral Resource estimate was based on geochemical analyses and density

measurements of core samples obtained by diamond drilling undertaken by Namibia Rare

Earths from 2010 to 2012, 2015 and more recently by Namibia Critical Metals from 2020 to

2021.

A total of 172 drill holes have been drilled at Area 4, of which 13 were collared outside the

defined Mineral Resource. In Area 2B, 46 drill holes were used to estimate the Mineral

Resource.

Half core samples of one met er lengths intervals were taken for analysis. The bagged core

samples were given a uniqu e sample reference number and di spatched for preparation at

Activation Labs (Actlabs) sample preparation facility in Windhoek. The core samples were

crushed to 2 mm, split using a riffle splitter and pulv erised to 105 microns. Pulverised sub -

samples were homogenised in a stainless-steel riffle splitter and a 15 g sample and duplicate

were drawn for analysis. The pulverised sample aliquots were shipped to the ISO/IEC 17025

accredited Actlabs analytical faci lity in Ancaster, Ontario, Canada. The REE’s were assayed

using lithium metaborate -tetraborate fusion and Inductively Coupled Plasma Mass

Spectrometry (ICP-MS).

The samples were subjected to a quality assura nce and control (QAQC) program consisting

of the insertion of blank samples and certified reference materials at Lofdal and the

preparation of a laboratory duplicate at the sample preparation facility in Windhoek. The

primary laboratory assay values were confirmed by duplicate samples assayed by a second

laboratory (ALS, North Vancouver, Canada). The Qualified Person is satisfied that the assay

results are of sufficient accuracy and precision for use in Mineral Resource estimation.

A three-dimensional geological model of the REE mineral isation and weathering surface was

constructed using the drill hole and trench data. A mineralised envelope was defined using a

10 ppm Dy2O3 threshold for Area 4 and 12 ppm Dy2O3 for Area 2B. The grades of the individual

light rare earth oxides (LREO) and individual heavy rare earth oxides (HREO) were estimated

using ordinary kriging into a block model for each deposit. Density was estimated using

inverse distance weighting.

Filing of Report

The NI 43-101 compliant technical report (“Report”) will be filed on SEDAR within the next 45

days.

The Qualified Person for the Mineral Resource estimate is Mr. Jeremy C. Witley (BSc Hons,

MSc (Eng.)) who is a geologist with more than 30 years’ experience in base and precious

metals exploration and mining as well as in Mineral Resource evaluation and reporting. He is

a Principal Resource Consultant for The MSA Group (an independent consulting company), is

registered with the South African Council for Natural Scientific Professions (SACNASP) and is

a Fellow of the Geological Society of South Africa (GSSA). Mr. Witley has the appropriate

relevant qualifications and experience to be considered a “Qualified Person” for the style and

type of mineralization and activity being undertaken as defined in National Instrument 43 -

101 Standards of Disclosure of Mineral Projects.

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