SCD.V · 2022-06-13 12:00:00

Imperial Mining Receives Positive Results FOR the Preliminary Economic Assessment (PEA) FOR Crater Lake Project Highlights

Economic Studies

IMPERIAL MINING RECEIVES POSITIVE RESULTS FOR THE

PRELIMINARY ECONOMIC ASSESSMENT (PEA) FOR CRATER LAKE

Project Highlights (all amounts are in CA$, unless otherwise stated):

• Gross metal revenue of the minerals produced from the operation total $15.2 billion over the life of the

operation.

• Gross earnings after-tax is $6.25 billion.

• The Project has a pre-tax net present value (NPV) of $2.97 billion and an after -tax NPV of $1.72 billion

(10% discount rate).

• Pre-tax internal rate of return (IRR) is 42.9% and an after-tax IRR of 32.8%.

• Annual Net revenues average $ 608.0 million from the sale of high -purity scandium oxide (Sc 2O3),

scandium-aluminum Master alloy (ScAl) and rare earth element (REE) hydroxide concentrate.

• The pre-tax capital payback is 2.5 years from the start of production.

• Total mined metal production over a minimum 25-year mining life based on the present resource base is

expected to be 110 t Sc2O3, 57,298 t of ScAl Master alloy and 23,578 t of REE hydroxide concentrate.

• The prices and market segments were based on estimates from comprehensive market studies by Ernst Young

for scandium and by Roskill Information Services for rare earths.

MONTREAL, QUEBEC – June 13, 202 2 – Imperial Mining Group Ltd. ("Imperial") (TSX

VENTURE: IPG; OTCQB: IMPNF ) is pleased to annou nce that it has received results of a positive

Preliminary Economic Assessment (PEA) for the Crater Lake TG Zone Scandium-Rare Earth Element (Sc-

REE) deposit from Imperial’s independent consultants, WSP Canada (“WSP”). The results show positive

cash-flow, strong Internal Rate of Return (IRR) and Net Present Value (NPV) metrics at discount rates of

up to 15% for a potential mining operation at the Crater Lake, Quebec (Table 1). The Crater Lake property

is in northeastern Québec, approximately 200 km east northeast of Schefferville, Québec (Figure 1).

Table 1 – Pre- and After-Tax Net Present Value (NPV) – Crater Lake, TG-Zone Deposit

Discount Rate Pre-Tax Net Present Value

(NPV) Million CA$

After-Tax Net Present Value

(NPV) Million CA$

@ 5%

@ 7%

@ 10%

@ 11%

@ 12%

@ 15%

$5,265

$4,145

$2,971

$2,675

$2,413

$1,794

$3,150

$2,455

$1,721

$1,535

$1,370

$977

Internal Rate of Return (IRR) 42.9% 32.8%

Payback from Production Startup 2.5 years 3.0 years

The salient metrics related to the PEA study of the TG North Lobe and the projected mining and processing

costs to produce Sc2O3, ScAl Master alloy and REE hydroxide concentrate are outlined in Table 2.

Table 2 – Project Metrics, Crater Lake TG North Lobe Deposit

Project Metric Units Value

Pre-tax NPV @ 10% $M 2,971

After-tax NPV @ 10% $M 1,721

Pre-tax IRR % (real) 42.9

After-tax IRR % (real) 32.8

Pre-tax Payback Period from start of production Years 2.5

Initial Direct Capital Expenditure (“CAPEX”) $M 602.9

Initial Indirect Capital Costs $M 108.8

Initial Project Contingency (25%) $M 159.2

Total Initial CAPEX (Direct + Indirect + Contingency) $M 870.9

Maximum Open-Pit Production Rate tpa 423,118

Maximum Concentrate Production Rate tpa 217,059

Mine Life (minimum) Years 25

Ramp-up to Full Production Years 2

Total Revenues $M 15,200

Average Annual Net Revenues $M 608

Total Operating Costs $M 3,727

Pre-tax Operating Cash Flow $M 10,309

After-tax Operating Cash Flow $M 6,259

Operating Margin % 63.8

Life-of-Mine Operating Cost Estimates Units Value

Open-Pit Mine, Mill and Transportation Operating Costs $/t mill feed 233

Hydrometallurgical Facility - Sc2O3 $/t mill feed 12

Master Alloy Facility - ScAl $/t mill feed 108

Selling, General & Administration (G&A) Costs $/t mill feed 8

Royalties (single payment buyout) $/t mill feed 0.20

Sustaining Capital Costs + Restoration $/t mill feed 20

Total Operating Costs $/t mill feed 381

Table 3 – Commodity Price Assumptions Used in the Financial Model

Metal Oxides / Alloy US$/kg Note

Scandium Oxide (Sc2O3) $1,500.00 USGS 5-year trailing average discounted by 61% 1

Al-2% Sc Master Alloy $204.00 USGS 5-year trailing average discounted by 40% 1

Dysprosium Oxide (Dy2O3) 2 $128.40 March 2022, Spot Prices, discounted by 70%

Lanthanum Oxide (La2O3) 2 $1.50 March 2022, Spot Prices, discounted by 70%

Neodymium Oxide (Nd2O3) 2 $49.20 March 2022, Spot Prices, discounted by 70%

Praseodymium Oxide (Pr2O3) 2 $49.20 March 2022, Spot Prices, discounted by 70%

Terbium Oxide (Tb4O7) 2 $584.40 March 2022, Spot Prices, discounted by 70%

Table 3 NOTES:

1 – Source: United States Geological Survey (USGS) 2021 Mineral Commodity Summary – Scandium and Scandium-Aluminum Master alloy.

2 - Only magnet REEs in the mixed REE product have accrued value, with prices discounted by 70% as project assumes REE sales as a mixed

bulk hydroxide product.

“The WSP study results confirm that the TG-Zone deposit has robust economics with the potential to be a

long-term provider of critical Scandium and magnet Rare Earths to world markets,” stated Peter J. Cashin,

President and Chief Executive Officer of Imperial. “We believe that the financial-model estimates used in

the PEA are conservative, as they apply discounted and historical average metal pricing. Project economics

improve substantially if current spot REE and ScAl Master alloy values are used. With rapidly accelerating

onshoring of Critical Minerals and Advanced Material supply chains we believe that this could position

Imperial advantageously to capture higher prices and thereby grow revenues. Our upcoming summer

exploration drilling of the Crater Lake project is intended to convert the Inferred Mineral Resources from

the TG North Lobe deposit reported in September 2021 to Indicated and, potentially, Measured Mineral

Resources. Work on the TG Southern Lobe, where drilling in 2019 returned 113.9 m grading 310 g/t

Sc2O3, is also planned with the prospect of linking the North and South Lobes of the deposit.”

WSP Canada General Project Description

The WSP study utilizes an open -pit mining operation model and a scandium price deemed conservative,

below the 20 21 USGS trailing five-year average price. Accepted consensus is that REE prices have

increased significantly since September 2021 and have been discounted by 70% for the purposes of this

study as REE will be delivered to a processor on a tolling basis for the magnet rare earth s only . The

commodity prices for this study and the assumptions used for the financial model are listed in Table 3. For

this study, the total tonnes of concentrate produced of Neodymium (Nd), Praseodymium (Pr), Dysprosium

(Dy) and Terbium (Tb) were considered marketable and contribute to revenues in the financial model as an

offset to Scandium (Sc) operating expenses.

WSP applied a conventional Truck and Shovel open -pit mining operation model to the TG North Lobe

Deposit at a production rate of 2,350 tonnes per day during a six-month per year operation period (Table 2,

Figure 2), using the $110.80 Net Smelter Return (NSR) cut-off presented in the Mineral Resource Estimate

previously reported by Imperial (Imperial Press Release, September 23, 2021).

The mine operation infra structure, storage and tailings facilities would be developed at Crater Lake. The

open-pit mine, crushing, milling, kilning and magnetic concentration plants w ould be built on -site, with

mineral concentrate transported during winter months to a storage in Emeril, NL by road to the twelve

months operational metallurgical and alloys plants to be located in Sept -Iles, Quebec by rail (Figure 3).

Existing road infrastructure will be accessed from the Crater Lake mine area via winter road for the initial

years of production as a means to reduce project CAPEX. Imperial has future plans to establish a permanent

road that would be financed from operating revenues.

Imperial expects to receive a copy of the final 43-101 PEA report from WSP within 45 days from the date

of this press release. The final PEA report, which is being prepared according to National Instrument 43-

101 Guidelines, will be filed on SEDAR and available under Imperial’s company profile at SEDAR.com

(Imperial Mining Group Ltd SEDAR Profile).

Project Optimization Opportunities

These PEA results have demonstrated the economic viability of the project and the project’s capability in

achieving high Sc and REE recoveries. However, there are still several process improvement opportunities

and infrastructure development options that will benefit the project.

Future project optimization programs and trade-off studies that are expected to yield further reduction in

CAPEX and/or OPEX include:

• Completion of the ongoing SGS hydrometallurgical program. The objective of this work is

to improve the scandium recovery, lower mine operating costs and reduce carbon footprint

of Imperial’s metallurgical process.

• Further investigation of sensor ore sorting as a pre-concentration step in mineral processing

to reduce ore milling cost.

• Development of the Al-2%Sc Master Alloy technology.

• Economic trade-off study focused on mineral concentrate transportation from the mine site

to the processing plant at Sept Iles evaluating simplification of the design of concentrate

storage, loading and unloading using silos.

• Converting winter road access to the property from the existing road infrastructure to a

permanent road to be financed from the operation revenues.

• Source electrical power from renewable sources at the Mine site (wind, solar, in-river hydro

power) to reduce energy costs and carbon emissions.

Crater Lake TG North Lobe Scandium-Rare Earth Resource Model

The PEA study was based on a Mineral Resource Estimate undertaken for Imperial by InnovExplo of Val

d’Or, Quebec (see Imperial Mining Press Release - SEP 23, 2021, Table 4, Figure 4).

The resources estimation was undertaken using the diamond drillhole data completed over the Northern

Lobe of the TG Scandium -Rare-Earth mineralized Zone. Mineralization is related to an iron -rich syenitic

intrusive (Ferrosyenite) sill and dyke system and w as drilled over a strike length of 300 m, to a vertical

depth of 200 m. Intersection lengths through the zone varied between 10.7 m and 111.9 m, representing a

true thickness of up to 100 m. There was an observed general increase in resource grade and true thickness

to mineralization at depth below the pit-shell and towards the north. The definition drilling was completed

over the northern half (Northern Lobe) of the magnetic target that defines the TG Zone. Drilling on a single

section (100N) on the south half of the TG target (Southern Lobe) returned 113.9 m grading 310 g/t Sc2O3

at a vertical depth of 90 m and is open to resource expansion in all directions (see Imperial Mining Press

Release: June 18, 2019). In addition, numerous Scandium-Rare-Earth resource opportunities remain to be

drill-defined on the property and will be evaluated in future exploration programs.

Table 4 – Crater Lake TG North Lobe Mineral Resource Estimate