Kuniko Limited provides an update on its drilling and exploration activities on its Skuterud cobalt project in Norway

Kuniko Limited has given an update on its drilling and exploration activities on its Skuterud Cobalt project in Norway. A diamond drilling program on the Skuterud Cobalt Project (see: Figure 1) started on 2 May 2022 with a planned 2,800 meters in 7 diamond core (DD) holes on the three target prospects for potential cobalt mineralization, north of the historic Skuterud Cobalt mine. All targets are located by the presence of conductive anomalies in depth, with two targets within the ‘fahlband’ trend where historical mining has taken place. The drilling program has since been expanded to approximately 3,000 meters and 10 DD holes, making it possible to carry out further drilling on the priority Dinner Rest target. The drilling started in the northernmost goal “Døvikkollen B”, with the two wells KNI_DKB001 and KNI_DKB002 completed on site on 19 May 2022 (see: Figure 2), while in the second goal “Damtjern” one well KNI_DMT001 was completed on 2029. May, Drilling on the third target, closest to the historic cobalt mine and with the strongest geophysical response, began on June 2, 2022, and as of the date of this announcement, five wells have been completed. A total of 2,500 meters have been drilled and the program is expected to be completed by mid-July 2022. Cobalt minerals, cobaltite and shale audit (or other cobalt-containing minerals with similar optical properties as shutter audit) have been observed within the large sulphide horizon that was the target of historical mining) in kernels of the Dinner Rest target (see: Figure 4) during preliminary logging on site. They are associated with scattered, veined, rarely semi-solid sulfide mineralization, predominantly pyrrhotite with less lime pyrite and pyrite. Cobalt minerals occur in various textural contexts, such as dispersed porphyroblasts or grain aggregates that form bands parallel or semi-parallel to the main leaves or the displacement, interstitial between coarse lime silicates, such as diopside, i.a. by contact with quartz veins, is cut through all five boreholes at Midday rest, which defines a mineralized zone open to the depth. The mineralization is mainly observed in quartzites, diopside lime silicates and magnesium biotite / phlogopite shale. The main sulphide horizon (see Figure 5, red color in the profile) is estimated to vary from 30 m to more than 50 m (actual thickness unknown), including dry sections within and / or scattered sulphid sections within adjacent units. This estimate is based on preliminary logging and is considered subjective. Complete and detailed logging is underway and an update will be delivered on time. Better estimates will be possible after the logging of all cores is completed. Further thinner (up to 5 m core, actual thickness unknown) mineralized positions are intersected in deeper parts of the lithological sequence. The second mineralized zone hosts quartzites and lime-silicate rocks at the contact, but largely below the biotite-sillimanite shale marking horizon. A third intersection of sulfides is observed under a thick mafic unit, which in turn hosts quartzites with fewer lime silicates. The rocks show a complex deformation with possibly an intricate folding of the mineralized rocks. The noon rest drilling program has provided valuable information on the location of the mineralization in the rock sequence. The mineralization takes place in quartzite, magnesium biotite / phlogopite quartz shale and lime-silicate rocks over biotite-graphite-pyrrhotite shale followed by biotite-sillimanite shale. The succession of these two very different lithological units is considered a good marker horizon that will be an important goal in future boreholes and geological surface mapping. In collaboration with GeoVista, a geological consulting firm, Kuniko has created additional models of SkyTem’s geophysical data, resulting in better defined target areas to optimize drilling design at Midday Rest. The modeling yielded leading plate anomalies over Noon Rest for each of the six intersecting flight lines. The location of the conductive plates tilts to the north, leaving even more targets open along the north side. Structural geological data from drilling and geological mapping, together with the position of the conductive plates, will be used in the interpretation of the deformation and folding style of the Mid-Rest Cutting sequence. The results will guide the planning of additional wells in the Midday Rest goal. In parallel with the drilling program, Kuniko has begun further exploration of the historic core of drilling carried out in 2017 by the former exploration licensee, Berkut Minerals Ltd. (“Berkut”). By studying Kuniko’s geophysical surveys in the borehole conducted at the Berkut wells in Middagshville, Kuniko identified several unanalyzed ranges with promising geophysical signatures. In order to better understand the mineralization and content distribution in Middagshville, re-extraction of the historical cores that are available in the core archive for the Norwegian Geological Survey (“NGU”), which is located in Løkken Verk. A total of 184 samples of a total of 200.59 meters have been taken, which are now being sent to ALS for examination. This process will enable Kuniko to integrate the results and data from these wells into the geological model, bringing the sampling of these historical wells to the same high level of detail now recorded for Kuniko’s current drilling program. Drilling in the target areas Døvikkollen B and Damtjern has not demonstrated visible mineralization, but they will be evaluated to better understand their geological and geophysical context. The two boreholes in Døvikkollen B have a rock sequence of cross-section consisting of mainly mafic rocks interrupted by thinner quartz biotite shale and pegmatites. A borehole at Damtjern KNI_DMT001 has intersected rocks consisting of quartzites interrupted by thinner zones of pomegranate amphibolite and albitized mafic rocks. This borehole also has a subvertical 100 m wide fissure zone with cut rocks. The conductive anomalies that were the target of the wells at these two sites need to be investigated further. Kernels are logged on site throughout the program and sent to a centralized core supplier for shooting, cutting and sampling, after which the samples are sent to ALS laboratories in Sweden for analysis. The lead time for the results after ALS Sweden has received the samples is still approx. 60-90 days. Kuniko regularly submits batches of drill cores to minimize processing time for reporting results.

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