Mr. Craig Taylor reports

DEFENSE METALS UPDATES METALLURGICAL TEST WORK AND PRELIMINARY FEASIBILITY STUDY PROGRESS FOR ITS WICHEEDA RARE EARTH ELEMENTS PROJECT

Defense Metals Corp. has provided an update on the metallurgical work programs, undertaken by SGS Canada Inc., and the continuing preliminary feasibility study (PFS) work by SRK Consulting (Canada) Inc. and Hatch Ltd., for its wholly owned Wicheeda rare earth element (REE) project located in British Columbia, Canada.

Highlights of metallurgical test work and PFS-related matters:

1. The metallurgical test work required for the PFS has been completed. Multiple bench-scale flotation and flotation pilot plant test work resulted in the production of a high-grade mineral concentrate containing 50 per cent total rare earth oxide (TREO) with an 80-per-cent recovery rate, which will be included in the PFS for the first eight years of mine life.
2. Bench-scale and hydrometallurgical pilot plant test work shows that the planned acid bake process will deliver approximately 90-per-cent TREO extraction from the mineral concentrate to a mixed rare earth carbonate product.
3. The PFS plant flowsheets are completed, based on the metallurgical test work, and equipment specifications have been issued to vendors for cost quotations.
4. The field-based geotechnical, geochemical and environmental test work required for the PFS have been completed, and lab-based studies are in progress.
5. Other PFS tasks, including open-pit mine design and tailings storage trade-off studies are well advanced.
6. Economic evaluation and cash flow modelling are in progress.
7. PFS report completion in the second quarter of 2024 is on schedule.
8. Eleven mixed rare earth precipitate samples from the hydrometallurgical test work have been sent to potential partners, processors or end-users.
9. Over the past five years, Defense Metals drilled 58 core holes totalling 12,073 metres (approximately 39,610 feet) to define the Wicheeda rare earth element (REE) deposit and provide samples for metallurgical test work. This work resulted in measured and indicated (M+I) resources of 34.2 million tonnes (Mt), averaging 2.02 per cent TREO, inclusive of 17.8 million tonnes of high-grade dolomite carbonatite averaging 2.92 per cent TREO, in addition to inferred resources of 11.1 million tonnes, averaging 1.02 per cent TREO. This represents a 260-per-cent increase over the Defense Metals' initial 2019 mineral resource estimate, and a conversion to M+I of 101 per cent of the prior 2021 mineral resource estimate.
10. Total expenditures on the Wicheeda REE project since 2019, including costs for mineral resource estimate definition, all metallurgical test work, earlier studies and the remaining PFS-related costs, are in excess of $17.5-million.
11. Defense Metals has entered into a strategic co-design agreement with the McLeod Lake Indian Band (MLIB), the first nations community having the traditional territory on which the Wicheeda project sits.

Note: TREO per cent is the sum of CeO2 (ceric oxide), La2O3 (lanthanum oxide), Nd2O3 (neodymium oxide), Pr6O11 (praseodymium oxide), Sm2O3 (samarium oxide), Eu2O3 (europium oxide), Gd2O3 (gadolinium oxide), Tb4O7 (terbium oxide), Dy2O3 (dysprosium oxide) and Ho2O3 (holmium oxide) percentages.

Craig Taylor, chief executive officer of Defense Metals, stated: "Continuing positive results from our technical studies suggest that our wholly owned Wicheeda REE project has the potential to become the next producer of rare earth elements in North America, accounting for a significant amount of the rare earths needed for the Western world's future magnet metal production. We look forward to completing and filing the PFS for the Wicheeda REE project in Q2 2024 and, subject to financing, moving directly into our feasibility study."

Metallurgical test work:

• Extensive comminution, beneficiation, hydrometallurgical and environmental tests have been completed, and the resulting data have been applied in the PFS. These tests have studied development and optimization of milling and hydrometallurgical processes, and the response of 21 variability samples representing different REE grades, lithologies and locations within the deposit;
• From 2018 to date, about $5-million has been spent on metallurgical test work and the development of the metallurgical flowsheets for the Wicheeda REE project;
• 31 samples of deposit material, flotation and hydrometallurgical products have been subjected to detailed mineralogical examination;
• 21 samples have been subjected to bond milling index and SMC comminution tests;
• 210 open-circuit flotation tests and seven locked-cycle flotation tests, of samples ranging from one kilogram to 12 kg, and a 26-tonne pilot flotation operation have been completed;
• 63 static acid bake tests and 16 short-duration acid bake kiln runs with associated water leach tests were completed. Additionally, SGS completed a total of 15 days of continuous kiln operation (in one five-day and one 10-day segment) as part of a fully integrated hydrometallurgical pilot plant operation that processed 560 kg of flotation concentrate;
• Approximately 40 bench-scale impurity removal tests were done, as well as about 40 rare earth precipitation tests, and results were incorporated in the integrated hydrometallurgical pilot plant operation and the project process design criteria;
• Many other small-scale tests examined water recycle options and other aspects of the metallurgical flowsheets;
• The liquid-solid separation characteristics of the flotation plant products, and those of the hydrometallurgical plant, have been determined through appropriate thickening and filtration tests;

PFS plant design

Results from the metallurgical test work have been used to develop flowsheets for the planned comminution, beneficiation and hydrometallurgical plants. These flowsheets have been completed, reviewed and used to generate major equipment specifications for grinding mills, kilns et cetera, which have been issued to equipment suppliers for quotes.

The metallurgical process design, engineering and costing are on schedule to allow completion of the PFS in Q2 of 2024.

Optimization of open-pit mining

Geotechnical investigation work for the mine design and pit optimization was performed by SRK and completed in December, 2023. This work included 16 geotechnical drill holes totalling 225.5 metres, and 20 excavated overburden geotechnical test pits. Within the Wicheeda REE deposit pit shell, six diamond drill holes totalling 1,182 m were completed, inclusive of four open-pit geotechnical drill holes totalling 920 m, and in-pit exploration holes totalling 262 m.

Pit design work is under way, incorporating the latest geotechnical information provided from the 2023 geotechnical drilling program.

Community engagement

Defense Metals entered into a co-design agreement with the McLeod Lake Indian Band (MLIB) (see news release dated Jan. 17, 2024), thus solidifying a joint commitment to the successful advancement of the Wicheeda REE project. The co-design agreement emphasizes a joint planning approach, empowering MLIB to play an integral part in the design and decision-making process in the technical, social, engineering and environmental aspects of the Wicheeda REE project. This agreement expands upon the mineral exploration agreement memorandum of understanding (MOU) previously entered into with MLIB.

The McLeod Lake Indian Band purchased an equity stake in Defense Metals, signalling its long-term commitment to the success of the Wicheeda REE project.

Infrastructure and tailings management studies

Trade-off studies are being performed on the various options being considered for tailings management and infrastructure locations are being determined.

The Wicheeda REE project has excellent infrastructure and logistics, which are expected to allow for lower operating and capital costs, including:

• The future mine site and beneficiation plant will be located:
  • Along a permitted Forest Service Road approximately 38 kilometres east from the paved John Hart Provincial Highway at the community of Bear Lake;
  • Approximately 37 km from the Canadian National Railway mainline;
  • Approximately 36 km from the main natural gas distribution pipeline;
  • Approximately 34 km from high-voltage powerlines that supply British Columbia with abundant green hydroelectric power;
  • Approximately 110 km from an international airport in Prince George.
• British Columbia has a long history of mining and its industry participants are recognized worldwide as expert in open-pit mining and mineral processing.
• Prince George is a major industrial centre supplying both the mining and wood products industries. Most of the equipment that will be required for the mining operation will be supplied by companies already established in the area.
• Multiple options exist for location of the hydrometallurgical plant site close to reagent supply.
• Easy access to the year-round port of Prince Rupert, the closest North American port to Asian markets.

Environmental test work and field studies

Environmental and geochemical test work has been performed on both flotation and hydrometallurgical plant products, and mixtures thereof. Data have been used by SRK in the design of facilities.

Surface water sampling and field investigations commenced in 2022, and will continue through 2024. The results of these and future environmental investigations will be used to inform siting, design and mitigation planning, as well as to prepare technical data reports to support environmental assessment and permitting processes.

Qualified persons

The scientific and technical information concerning metallurgy and processing contained in this news release as it relates to the Wicheeda REE project has been reviewed and approved by J.R. Goode, PEng, a metallurgical consultant to the company and a qualified person as defined in National Instrument 43-101. This news release has also been reviewed and approved by Kristopher J. Raffle, PGeo (B.C.), a technical consultant to the company, a principal and consultant of APEX Geoscience Ltd. of Edmonton, Alta., and a qualified person as defined in NI 43-101.

About Defense Metals Corp.

Defense Metals is a mineral exploration and development company focused on the development of its 100-per-cent owned, 8,301-hectare (approximately 20,534-acre) Wicheeda REE project that is located on the traditional territory of the McLeod Lake Indian Band in British Columbia, Canada.

The Wicheeda REE project, approximately 80 kilometres (approximately 50 miles) northeast of the city of Prince George, is readily accessible by a paved highway and all-weather gravel roads, and is close to infrastructure, including hydro power transmission lines and gas pipelines. The nearby Canadian National Railway and major highways allow easy access to the port facilities at Prince Rupert, the closest major North American port to Asia.

We seek Safe Harbor.