Mr. Craig Taylor reports

DEFENSE METALS ANNOUNCES UPDATED AND INCREASED MINERAL RESOURCE ESTIMATE FOR ITS WICHEEDA RARE EARTH ELEMENT CARBONATITE DEPOSIT

Defense Metals Corp. has completed an updated mineral resource estimate (MRE) with respect to its 1,708-hectare (4,220-acre) Wicheeda rare earth element (REE) project, located near Prince George, B.C., Canada.

Highlights:

• 49-per-cent increase in overall tonnage (1) of updated Wicheeda REE project MRE based on the results of 2019 diamond drilling of 13 holes totalling 2,005 metres;
• 30-per-cent increase in overall average grade (1), in part though the incorporation of potentially economically significant praseodymium not previously estimated;
• Conversion of 4.89 million tonnes to indicated resources (1) previously defined as inferred;
• Increased inferred resources by 730,000 tonnes in comparison with Defense Metals' initial Wicheeda MRE;
• Potential for expansion of the Wicheeda deposit to the north and west in the down plunge direction.

The updated Wicheeda MRE comprises an indicated mineral resource of 4.89 million tonnes averaging 3.02 per cent LREO (light rare earth elements), in addition to an inferred mineral resource of 12.1 million tonnes averaging 2.52 per cent LREE reported at a cut-off grade of 1.5 per cent LREE (sum of cerium (Ce), lanthanum (La), neodymium (Nd), praseodymium (Pr) and samarium (Sm); in addition to niobium (Nb) percentages). The lower cut-off grade was established based on consideration of metal price and concentrate payable, metallurgical recovery, and operating cost assumptions and uncertainty. The resource, constrained by applying a conceptual Lerchs-Grossman (LG) pit shell, is provided in the attached table, which includes a review of the MRE at a range of cut-off grades.

Craig Taylor, president and chief executive officer of Defense Metals, commented: "With the release of our updated mineral resource estimate, Defence Metals has delivered on another significant milestone in advancing what management believes is one of the most compelling undeveloped rare earth element assets in North America. Our successful 2019 drill campaign has resulted in a significant expansion and increased level of confidence in the mineral resources of the Wicheeda REE deposit, which remains open to the north and west."

                      INDICATED AND INFERRED RESOURCES FOR LREE AND SENSITIVITY ANALYSIS
 
             Cut-off        Tonnes >                                  Grade > cut-off
Category      (total         cut-off        Ce       La       Nd      Pr     Sm     Nb    LREE (3)   LREO (4)
             metal %         (tonnes)       (%)      (%)      (%)     (%)    (%)    (%)        (%)        (%)
                 (2))

                 1.0       5,150,000      1.22     0.91     0.26    0.10   0.02   0.02       2.52       2.95
                 1.5       4,890,000      1.26     0.94     0.26    0.11   0.02   0.02       2.58       3.02
Indicated        2.0       3,950,000      1.35     1.01     0.28    0.11   0.02   0.02       2.77       3.25
                 2.5       2,390,000      1.53     1.14     0.31    0.13   0.02   0.02       3.12       3.66
                 3.0       1,140,000      1.76     1.31     0.35    0.15   0.02   0.02       3.57       4.19
                 3.5         500,000      2.01     1.48     0.38    0.17   0.02   0.02       4.05       4.75
                 1.0      13,770,000      1.13     0.83     0.25    0.10   0.04   0.02       2.33       2.72
                 1.5      12,100,000      1.20     0.89     0.27    0.10   0.02   0.04       2.48       2.90
                 2.0       8,890,000      1.33     0.99     0.29    0.11   0.02   0.03       2.75       3.22
Inferred
                 2.5       5,320,000      1.50     1.13     0.33    0.13   0.03   0.03       3.11       3.65
                 3.0       2,670,000      1.70     1.29     0.37    0.14   0.03   0.02       3.53       4.14
                 3.5       1,190,000      1.90     1.45     0.41    0.16   0.04   0.02       3.95       4.63

(1) In comparison with Defense Metals' initial Wicheeda MRE. Details with respect to the initial Wicheeda REE deposit MRE are summarized in Defense's National Instrument 43-101 technical report titled "Wicheeda Rare Earth Element Project, British Columbia, Canada," effective date of June 20, 2019, available on SEDAR.

(2) Total metal percentage cut-off is expressed as the sum of Ce plus La plus Nd plus Pr plus Sm plus Nb percentages.

(3) The LREE percentage is expressed as the sum of light rare earth element Ce plus La plus Nd plus Pr plus Sm percentages.

(4) The LREO percentage is expressed as the sum of light rare earth elements expressed as oxides.

Notes for resource table:

• The mineral resource estimate was prepared by Steven J. Nicholls (MAIG) and Warren Black, MSc, PGeo, of Apex Geoscience Ltd., with geological modelling contribution by Kristopher J. Raffle, PGeo, of Apex Geoscience, and a director of Defense Metals, in accordance with CIM (Canadian Institute of Mining, Metallurgy and Petroleum) definition standards and NI 43-101, with an effective date of April 29, 2020.
• Mineral resources that are not mineral reserves do not have demonstrated economic viability. There has been insufficient exploration to allow for the classification of the indicated and inferred resources tabulated as a measured mineral resource; however, it is reasonably expected that the majority of the indicated and inferred mineral resources could be upgraded to indicated or measured mineral resources with continued exploration. There is no guarantee that any part of the mineral resources discussed herein will be converted into a mineral reserve in the future.
• Mineral resources are reported at a cut-off grade of 1.5 per cent LREE (light rare element, sum of Ce, La, Nd and Pr in addition to Nb and Sm percentages).
• The cut-off grade includes the following considerations:
  • Metal prices of: Ce equals $2.11 (U.S.) per kilogram; La equals $2.10 (U.S.); Nd equals $51.44 (U.S.); Pr equals $561.90 (U.S.); Nb equals $30.29 (U.S.); and Sm equals $2.07 (U.S.);
  • Exchange rate of 75 U.S. cents to $1 (Canadian);
  • Concentrate production grades of: Ce equals 23.7 per cent; La equals 17.9 per cent; Nd equals 5.3 per cent; Pr equals 1.8 per cent; Nb equals 0.5 per cent; and Sm equals 0.01 per cent;
  • Concentrate payable of 80 per cent;
  • Hydromet refining charges of 70 cents per kilogram concentrate;
  • Off-site transport costs of $180 per tonne.
• No royalties have been applied (a 2-per-cent royalty payable to the vendor adds LREE 0.02 per cent to the cut-off item, which is beyond the accuracy of the cut-off item and has no material impact to the resource estimate).
• The resources are constrained by resource pit shell generated using the following inputs:
  • Mining cost of $3.50 per tonne;
  • Waste mining costs of $3.25 per tonne;
  • Process costs of $40 per tonne (includes $10 per tonne for transporting from pit to mill);
  • General and administrative costs of $7 per tonne;
  • Process recoveries: Ce equals 85.7 per cent; La equals 85.7 per cent; Nd equals 85.7 per cent; Pr equals 85.7 per cent; Nb equals 57.0 per cent; and Sm equals 85.7 per cent;
  • Overall pit slope angles of 45 degrees.

The resource is classified according to the CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines dated Nov. 29, 2019, and CIM Definition Standards for Mineral Resources and Mineral Reserves dated May 10, 2014. An NI 43-101 technical report disclosing the updated Wicheeda REE project MRE will be filed on SEDAR within 45 days.

Factors that may affect the estimates include: metal price and concentrate payable assumptions, changes in interpretations of mineralization geometry, continuity of REE mineralization zones, changes to kriging assumptions, metallurgical recovery assumptions, operating cost assumptions, confidence in the modifying factors, including assumptions that surface rights to allow mining infrastructure to be constructed will be forthcoming, delays or other issues in reaching agreements with regulatory authorities and stakeholders, and changes in land tenure requirements or in permitting requirements.

Updated mineral resource estimate details

The drill hole database used to calculated the MRE is composed of 27 exploration diamond drill holes completed in 2008 and 2009 by previous operators (14 holes totalling 2,244 metres) and in 2019 by Defense Metals (13 holes totalling 2,005 metres), containing a total of 1,315 drill core samples analyzed for REE by multielement fusion, inductively coupled plasma mass spectrometry (ICP-MS) and pressed pellet X-ray fluorescence (XRF) methods. Sample intervals ranged from 0.5 to 7.1 metres in length, with 96 per cent of the intervals having a length of 3.0 metres or less.

The Wicheeda 3-D geological model created by Apex Geoscience integrates assay and geological data collected from diamond core drilling; surface geologic mapping; soil geochemical; airborne magnetic; and radiometric geophysical surveys. Based on these data, the Wicheeda REE deposit is modelled as a southeast-trending, north-to-northeast-dipping, composite-layered, syenite-carbonatite sill complex, having dimensions of approximately 400 metres north-south by 100 to 250 metres east-west. Diamond drilling data support the interpretation of a moderately north-northeast-dipping, shallowly north plunging, layered sill complex, having low-REE-grade syenite at its base, overlain by transitional intermediate REE-grade hybrid xenolithic-carbonatite (fenite) and finally relatively higher-REE-grade dolomite-carbonatite rocks, which form the main body of the Wicheeda REE deposit outcropping at surface. Based on the drill results to date, the eastern margin of the Wicheeda REE deposit is marked by a north-northwest-trending subvertical lithologic contact. This layered sill complex occurs within an unmineralized limestone waste rock. There remains the potential for expansion of the Wicheeda deposit to the north and west in the down plunge direction, where 2019 drilling indicates the deposit remains open.

The dolomite-carbonatite, xenolithic-carbonatite, syenite and limestone have different mineralization controls and styles that contain varying grades of REE. Therefore, these four rock types modelled within the 3-D geological model are used to define the estimation domains used to calculate the MRE. The 3-D rock model was used to discretize drill hole data and the volume of the deposit into distinct zones (domains) that were treated separately during exploratory data analysis and resource estimation.

Length-weighted average composites of three-metre core length, restricted to each rock type, were calculated and used for exploratory data analysis and resource estimation. Composites were capped to a specified maximum value for each estimation and metal of interest. Composites within each domain are evaluated to determine appropriate capping levels for each estimated metal. Only the dolomite-carbonatite estimation domain within the east fault block contains enough data to allow the modelling of a robust variogram for each of the metals of interest. The modelled variograms from that domain are scaled to the variance of the composites within the other estimation domains. These scaled variograms were used for resource estimation.

A block model with a regularized cell size of three metres (X) by three metres (Y) by three metres (Z) was used to estimate grade for each metal for the MRE ordinary kriging (OK). The percentage of the volume of each block below the bare earth surface and within each rock type was calculated using the 3-D geological model and a 3-D surface model. The search ellipsoid size used to estimate each metal was defined by the modelled variograms, which range from 100 to 140 metres in the major axis, 80 to 100 metres in the minor axis and 11 to 15 metres in the vertical axis. Block estimation employed varying anisotropy, which uses different rotation angles to define the principal directions of the variogram model and search ellipsoid on a per-block basis. Blocks within estimation domains are assigned rotation angles using a modelled 3-D mineralization trend surface wire frame, which allows structural complexities to be reproduced in the estimated block model. A total of 795 density measurements were used to assign density to each block based on its dominant rock type. Density values applied to the block model were: 2.94 grams per cubic centimetre (dolomite-carbonatite), 2.87 grams per cubic centimetre (xenolithic-carbonatite), 2.70 grams per cubic centimetre (syenite) and 2.74 grams per cubic centimetre (limestone). The final grade estimates are validated visually by comparing each block's metal estimates with the raw downhole assay data and statistically by generating swath and volume variance plots.

Qualified person

The scientific and technical information contained in this news release as it relates to the Wicheeda rare earth element project has been reviewed and approved by Kristopher J. Raffle, PGeo (British Columbia), principal and consultant of Apex Geoscience of Edmonton, Alta., a director of Defense Metals, and a qualified person as defined in National Instrument 43-101 (Standards of Disclosure for Mineral Projects). Mr. Raffle verified the data disclosed, which include a review of the analytical and test data underlying the information and opinions contained therein.

The Wicheeda deposit mineral resources have an effective date of April 29, 2020. The qualified persons responsible for the estimate are Steven J. Nicholls (MAIG), and Warren Black, MSc, PGeo, of Apex Geoscience, with geological modelling contribution by Kristopher J. Raffle, PGeo, of Apex Geoscience, a director of Defense Metals, in accordance with CIM definition standards and NI 43-101.

About the Wicheeda REE property

The 1,708-hectare Wicheeda REE property, located approximately 80 kilometres northeast of the city of Prince George, B.C., is readily accessible by all-weather gravel roads and is nearby to infrastructure, including power transmission lines, the CN railway and major highways.

Geologically, the property is situated in the Foreland belt and within the Rocky Mountain trench, a major continental geologic feature. The Foreland belt contains part of a large alkaline igneous province, stretching from the Canadian Cordillera to the southwestern United States, which includes several carbonatite and alkaline intrusive complexes hosting the Aley (niobium), Rock Canyon (REE) and Wicheeda (REE) deposits.

About Defense Metals Corp.

Defense Metals is an advanced mineral exploration company focused on the acquisition of mineral deposits containing metals and elements commonly used in the electric power market, military, national security and the production of green energy technologies, such as high strength, lightweight, rare earth magnets. Defense Metals' primary focus is to exercise its option to acquire 100 per cent of the 1,708-hectare Wicheeda rare earth element project.

We seek Safe Harbor.