Hermosa Project Update

· 52% increase in the Taylor Ore Reserve to 99Mt, supported by successful infill drilling programs.

· 10% increase in the Taylor Mineral Resource to 169Mt, which remains open at depth and laterally.

· 32% increase in the Peake Mineral Resource to 33Mt, with ongoing drilling to test the potential for a continuous mineralised system connecting Peake and Taylor Deeps.

· An increase in Taylor's initial operating life from ~28 years to ~33 years, with life extensions beyond the mine plan of operations subject to future regulatory approvals.

· 17% increase in life of mine production to 10.4Mt ZnEq6 (3.7Mt zinc, 4.6Mt lead, 247Moz silver).

· Annual average steady-state production of 346kt ZnEq (123kt zinc, 155kt lead, 8.2Moz silver). 

· Growth capital expenditure revised to ~US$3,300M, with ~US$2,100M to be spent over Q4 FY26 to H2 FY28.

· Sustaining capital expenditure revised to average ~US$50M per annum, including spend on the decline and underground infrastructure over FY28 to FY30. 

· Operating unit costs revised to ~US$100/t, reflecting general inflation and higher assumed energy costs.

Unit

Projectupdate(a)

Feasibility

study(b)

Production

Nameplate processing capacity

Mtpa

~4.3

~4.3

Initial operating life

Years

~33

~28

First production

FY

H2 FY28

H2 FY27

Mined ore grades (average)

%, g/t

3.7% Zn, 4.1% Pb, 76 g/t Ag

3.9% Zn, 4.3% Pb, 78 g/t Ag

Annual payable zinc production (average/steady state)

kt

~111 / ~123

~114 / ~132

Annual payable lead production (average/steady state)

kt

~141 / ~155

~142 / ~163

Annual payable silver production (average/steady state)

Moz

~7.5 / ~8.2

~7.4 / ~8.5

Annual payable ZnEq production (average/steady state)

kt

~314 / ~346

~318 / ~364(d)

Operating costs

Operating unit costs (average per tonne ore processed)

US$/t

~100

~86

Capital expenditure

Pre-production growth capital expenditure

US$M

~3,300(c)

~2,160

Sustaining capital expenditure (annual average)

US$M

~50

~36

Unit

Project

update(a)

Spot

case(b)

Financial

Annual average EBITDA (steady state)

US$M

~650

~800

Average EBITDA margin (steady state)

%

~58%

~64%

Annual average net cash flow (post tax, steady state)

US$M

~500

~650

Post tax NPV (real, 7.0% discount rate)7

US$M

~3,100

~4,500

Post tax IRR (nominal)7

%

~19%

~22%

Commodity price assumptions

Zinc

US$/t

~3,390 (from FY34)(c)

~3,470

Lead

US$/t

~2,200 (from FY34)(c)

~1,940

Silver

US$/oz

~50 (from FY34)(c)

~77

Ore Type

Measured

Mineral Resources

Indicated

Mineral Resources

Inferred

Mineral Resources

Total

Mineral Resources

Mt

%

Zn

%

Pb

g/t Ag

Mt

%

Zn

%

Pb

g/t Ag

Mt

%

Zn

%

Pb

g/t Ag

Mt

%

Zn

%

Pb

g/t Ag

UG Sulphide(a)

57

4.56

4.68

75

86

3.11

3.86

78

26

2.48

2.18

67

169

3.51

3.88

76

Ore Type

Proved Ore Reserves

Probable Ore Reserves

Total Ore Reserves

Reserve life

Mt

%

Zn

%

Pb

g/tAg

Mt

%

Zn

%

Pb

g/tAg

Mt

%

Zn

%

Pb

g/tAg

Years

UG Sulphide(a)

41

5.02

5.12

79

58

3.19

4.05

76

99

3.95

4.50

77

25

Ore Type

MeasuredMineral Resources

IndicatedMineral Resources

Inferred

Mineral Resources

TotalMineral Resources

Mt

%

Cu

%

Zn

%

Pb

g/t

Ag

Mt

%

Cu

%

Zn

%

Pb

g/t

Ag

Mt

%

Cu

%

Zn

%

Pb

g/t

Ag

Mt

%

Cu

%

Zn

%

Pb

g/t

Ag

UG Sulphide(a)

-

-

-

-

-

-

-

-

-

-

33

0.87

0.28

0.32

36

33

0.87

0.28

0.32

36

Item

Unit

Project update

Feasibility study

Initial operating life

Years

~33

~28

Total payable zinc production

Mt

~3.7

~3.2

Total payable lead production

Mt

~4.6

~4.0

Total payable silver production

Moz

~247

~208

Total payable ZnEq production

Mt

~10.4

~8.9(a)

Unit

Project update(a)

Spot case(b)

Zinc revenue(c) 

US$M

~10,800

~11,150

Lead revenue(c)

US$M

~9,200

~8,050

Silver revenue(c)

US$M

~12,600

~19,000

Total revenue(c)

US$M

~32,600

~38,200

Total EBITDA 

US$M

~18,900

~24,200

Total net cash flow

US$M

~12,200

~16,350

Annual average EBITDA (steady state)

US$M

~650

~800

Average EBITDA margin (steady state)

%

~58%

~64%

Annual average net cash flow (post tax, steady state)

US$M

~500

~650

Post tax NPV (real, 7.0% discount rate)12

US$M

~3,100

~4,500

Post tax IRR (nominal)12

%

~19%

~22%

Investor Relations

Media Relations

Ben BakerT +61 8 9324 9363M +61 403 763 086E [email protected]

Jamie Macdonald T +61 8 9324 9000M +61 408 925 140E [email protected]

Ore Type

Measured

Mineral Resources

Indicated

Mineral Resources

Inferred

Mineral Resources

Total

Mineral Resources

Mt

%

Zn

%

Pb

g/t Ag

Mt

%

Zn

%

Pb

g/t Ag

Mt

%

Zn

%

Pb

g/t Ag

Mt

%

Zn

%

Pb

g/t Ag

UG Sulphide(a)

57

4.56

4.68

75

86

3.11

3.86

78

26

2.48

2.18

67

169

3.51

3.88

76

Ore Type

Measured

Mineral Resources

Indicated

Mineral Resources

Inferred

Mineral Resources

Total

Mineral Resources

Mt

%

Zn

%

Pb

g/t Ag

Mt

%

Zn

%

Pb

g/t Ag

Mt

%

Zn

%

Pb

g/t Ag

Mt

%

Zn

%

Pb

g/t Ag

UG Sulphide(a)

41

4.22

4.25

67

83

3.38

3.91

76

28

2.96

2.97

93

153

3.53

3.83

77

Ore Type

Proved Ore Reserves

Probable Ore Reserves

Total Ore Reserves

Reserve life

Mt

%

Zn

%

Pb

g/tAg

Mt

%

Zn

%

Pb

g/tAg

Mt

%

Zn

%

Pb

g/tAg

Years

UG Sulphide(a)

41

5.02

5.12

79

58

3.19

4.05

76

99

3.95

4.50

77

25

Ore Type

Proved Ore Reserves

Probable Ore Reserves

Total Ore Reserves

Reserve life

Mt

%

Zn

%

Pb

g/tAg

Mt

%

Zn

%

Pb

g/tAg

Mt

%

Zn

%

Pb

g/tAg

Years

UG Sulphide(a)

-

-

-

-

65

4.35

4.90

82

65

4.35

4.90

82

19

Ore Type

MeasuredMineral Resources

IndicatedMineral Resources

Inferred

Mineral Resources

TotalMineral Resources

Mt

%

Cu

%

Zn

%

Pb

g/t

Ag

Mt

%

Cu

%

Zn

%

Pb

g/t

Ag

Mt

%

Cu

%

Zn

%

Pb

g/t

Ag

Mt

%

Cu

%

Zn

%

Pb

g/t

Ag

UG Sulphide(a)

-

-

-

-

-

-

-

-

-

-

33

0.87

0.28

0.32

36

33

0.87

0.28

0.32

36

Ore Type

MeasuredMineral Resources

IndicatedMineral Resources

Inferred

Mineral Resources

TotalMineral Resources

Mt

%

Cu

%

Zn

%

Pb

g/t

Ag

Mt

%

Cu

%

Zn

%

Pb

g/t

Ag

Mt

%

Cu

%

Zn

%

Pb

g/t

Ag

Mt

%

Cu

%

Zn

%

Pb

g/t

Ag

UG Sulphide(a)

-

-

-

-

-

-

-

-

-

-

25

0.79

0.45

0.47

42

25

0.79

0.45

0.47

42

Low Case

Mid Case

High Case

Mt

%

Zn

%

Pb

g/tAg

Mt

%

Zn

%

Pb

g/tAg

Mt

%

Zn

%

Pb

g/tAg

Taylor Sulphide(a)

5

3.51

3.88

76

25

3.62

4.61

71

45

1.63

2.02

43

Low Case

Mid Case

High Case

Mt

%

Zn

%

Pb

g/tAg

Mt

%

Zn

%

Pb

g/tAg

Mt

%

Zn

%

Pb

g/tAg

Taylor Sulphide(a)

-

-

-

-

33

3.60

3.69

72

64

3.58

3.57

73

Sampling techniques

· The FY26 Taylor Mineral Resource Estimate is based on a database comprising of 740 drill holes, including 166 historical reverse circulation (RC/RCD) and 574 diamond core (DD) drill holes of primarily HQ and NQ sizes.

· In total, this database features approximately 634,100m of drilling. 227 holes totalling approximately 51,653m are excluded from the database where twinned holes were drilled or where the quality of drilling was compromised due to deficiencies in logging, survey, lack of assays, or quality assurance/control.

· 70 drill holes were used to refine the geological model but were not used in estimation.

· A heterogeneity study was undertaken in FY24 to determine sample representativity with recommendations to improve duplicate performance including increasing sub-sample and pulverising volumes.

· Sampling is predominantly at 1.5m intervals on a half-core basis.

· Core is competent to locally vuggy and sample representativity is monitored using half core field duplicates submitted at a rate of approximately 1:40 samples. Field duplicates located within mineralisation envelopes demonstrate an 80% performance to within 30% of original sample splits.

· Core assembly, interval mark-up, recovery estimation (over the 3m drill string) and photography are all activities that occur prior to sampling and follow documented procedures.

· Sample size reduction during preparation involves crushing and splitting of PQ (122.6mm), HQ (95.6mm) or NQ (75.3mm) half-cores.

· All 1.5m half core samples are crushed to 70% passing two-millimetre mesh and reduced to 1kg. 1kg sample is pulverised to 85% passing 75µm. Samples of 0.25g from pulps are processed at ALS (Australian Laboratory Services) Vancouver using a combination of inductively coupled plasma - mass spectrometry ICP-MS (ME-MS61) four-acid 48 element assay and addition of overlimit packages of OG62 for Ag, Pb, Zn, Mn, S-IR07 for sulphur, VOL50 for high grade Zn, VOL70 for high grade Pb, and ME-ICP81 for higher grade Mn.

Drilling techniques

· Data used for reporting results is based on logging and sampling of PQ, HQ, and NQ diamond core. Triple and split-tube drilling methods are employed in situations where ground conditions require such coring mechanisms to improve core recovery.

· From mid-August 2018 until September 2021, all drill cores were oriented using the Boart Longyear 'Trucore' system. In Q3 FY20, acoustic televiewer data capture was implemented for downhole imagery for most drilling to improve orientation and geotechnical understanding. From September 2021, the acoustic televiewer was the sole drill core orientation method applied. Structural measurements from oriented drilling are incorporated in geological modelling to assist with fault interpretation.

Drill sample recovery

· Core recovery is determined by summation of measurement of individual core pieces within each 3m drill string during the logging process. 

· Core recovery is recorded for all diamond drill holes. Recovery on a hole basis exceeds 90%.

· Poor core recovery can occur when drilling through the oxide material and in major structural zones. To maximise core recovery, drillers vary speed, pressure, and composition of drilling muds, reduce PQ to HQ to NQ core size and use triple tube and '3 series' drill bits.

· When core recovery is compared to Cu, Zn, Pb, and Ag grades for either a whole data set or within individual lithology, there is no discernible relationship between core recovery and grade.

· Correlation analysis suggests there is no relationship between core recovery and depth from surface except where structure is a consideration. In isolated cases, lower recovery is observed at intersections of the carbonates with a major thrust structure, or when locally natural karstic voids have been encountered alongside shallow historic workings.

Logging

· The entire length of core is photographed and logged for lithology, alteration, structure, rock quality designation (RQD) and mineralisation.

· Logging is both quantitative and qualitative, of which there are several examples including estimation of mineralisation percentages and association of preliminary interpretative assumptions with observations.

· All logging is peer reviewed against core photos. The context of current geological interpretation and information from surrounding drill holes are used when updating geological model.

· Geologic and geotechnical logging is recorded on a tablet with inbuilt Quality Assurance and Quality Control (QA/QC) processes to minimise entry errors before synchronising with the site database.

· Logging is completed to an appropriate level to support assessment of mineral resource estimates and exploration results.

Sub-sampling techniques and sample preparation

· Sawn half core samples are taken on predominantly 1.5m intervals for the entire drill hole after logging. Mineralisation is highly visual. Sampling is also terminated atlitho-structural and mineralogical boundaries to reduce the potential for boundary/dilution effects on a local scale.

· Sample lengths vary between 0.6m and 3m. The selection of the sub-sample size is not supported by sampling studies.

· All sample preparation is performed offsite at Australian Laboratory Services (ALS), an ISO 17025 certified laboratory. Samples submitted to ALS are generally four to six kilograms in weight.

· Sample size reduction during preparation involves crushing of PQ (122.6mm), HQ (95.6mm) or NQ (75.3mm) half or whole core, splitting of the crushed fraction, pulverisation, and splitting of the sample for analysis.

· Core samples are crushed and rotary split in preparation for pulverisation. Depending on the processing facility, splits are completed via riffle or rotary. Splits are used for pulp samples.

· Samples are crushed to 70% passing two-millimetre mesh. A 1kg split of crushed sub-sample is obtained via rotary or riffle splitter and pulverised to 85% passing 75µm. The 1kg pulp samples are taken for assay, and 0.25g splits are used for digestion.

· ALS protocol requires five percent of samples to undergo a random granulometry QC test. Samples are placed on a 2mm sieve and processed completely to ensure the passing mesh criterion is maintained. Pulps undergo comparable tests with finer meshes. Results are uploaded to an online portal for review by the client.

· The sub-sampling techniques and sample preparation procedures employed are adequate for generating reliable assay data necessary for the reporting of exploration results.

· Precision in sample preparation is monitored with blind laboratory duplicates assayed at a rate of 1:50 submissions.

· Coarse crush preparation duplicate pairs show that more than 85% of all Cu, Zn, Pb, and Ag pairs for sulphide mineralisation report within +/-30% of original samples. Performance significantly improves to 98.5% for all analytes in higher grade samples. With Cu and Zn reporting 100% pass rates.

· Pulp duplicates for Ag pass at 83%, Cu at 90%, Pb at 87%, and Zn at 92% within +/-20% tolerances. For higher pulp grade samples, the performance improves to 99% or higher for all elements of concern.

Quality of assay data and laboratory tests

· Historical descriptions of the analytical techniques conducted by ASARCO from 1950-1991 for 113 drill holes (15 drill holes are used in this mineral resource) from ASARCO AC (air circulation), RAB (rotary air blast), RC (reverse circulation) and DD (diamond drilling) are not available. As infill drilling continues near the original 113 drill holes, historical data is updated with modern techniques.

· From 2006 to 2009, Arizona Mining Inc (AMI) used Skyline Laboratories sampling with ICP-AES with atomic absorption spectrometry (AAS) to test for copper, lead, zinc and manganese after a multi-acid digestion. Silver and gold fire assays were undertaken by Assayers Canada in Vancouver from a split of each pulp using a 30g charge that was reduced in weight on occasion for high manganese oxide samples. In 2006, 4,272 ASARCO pulp samples (90% of sampling except for the silver, where the re-analysis program represented 77% of the total silver assays) were re-analysed to validate the copper, lead, zinc and manganese assay results.

· In 2010 to 2012, AMI changed to Inspectorate in Reno, Nevada laboratories for gravimetric fire assay of gold and silver, with repeat assays of silver values greater than 102g/t (3 ounces per US ton).

· From 2014 to 2020, samples of 0.25g from pulps were processed at ALS Vancouver. ME-ICP61 analysis was used where the samples were totally digested using a four-acid method followed by analysis with a combination of Inductively Coupled Plasma - Mass Spectrometry (ICP-MS) and Inductively Coupled Plasma - Atomic Emission Spectroscopy (ICP-AES) determination for 33 elements. Overlimit values for Ag, Pb, Zn and Mn utilise OG-62 analysis.

· In November 2020, the analytical method improved with ME-MS61 for the four-acid 48 element assay. Samples of 0.25g from 1kg pulps were processed at ALS Vancouver using a combination of inductively coupled plasma - mass spectrometry ICP-MS (ME-MS61) four-acid 48 element assay and addition of overlimit packages of OG62 for Cu, Ag, Pb, Zn, Mn, S-IR07 for sulphur, VOL50 for high grade Zn, VOL70 for high grade Pb, and ME-ICP81 for higher grade Mn.

· Digestion batches comprising 36 samples plus four internal ALS control samples (one blank, two certified reference material (CRM), and one duplicate) are processed using four-acid digestion. Analysis is conducted in groups of three larger digestion batches. Instruments are calibrated for each batch before and after analysis.

· The performance of ALS internal QA/QC samples is continuously monitored. In the event of a blank failure, the entire batch is re-processed from the crushing stage. If one CRM fails, data reviewers internal to ALS examine the location of the failure in the batch and determine how many samples around the failure should be re-analysed. If both CRMs fail, the entire batch is re-analysed. No material failures have been observed from the data.

· Coarse and fine-grained certified silica blank material submissions, inserted at the beginning and end of every work order of approximately 200 samples, indicate a lack of systematic sample contamination in sample preparation and ICP solution carryover. Systematic contamination issues are not observed for the blanks.

· A range of CRMs are submitted at a rate of 1:40 samples to monitor assay accuracy. All CRMs near mineralised intervals passed QA/QC.

· The nature and quality of assaying and laboratory procedures are appropriate for supporting the disclosure of mineral resource estimates and exploration results.

Verification of sampling and assaying

· Core photos of the entire hole are reviewed by modelling geologists to verify significant intersections and to finalise the geological interpretation of core logging.

· In September of 2023, the database was migrated from a software as a service (SAAS) product (Plexer) to an internally hosted web application and database (acQuire) hosted on South32's Azure environment. Geological data is uploaded via the acQuire Arena web application by onsite geologists. Laboratory information management system (LIMS) data from the ALS laboratory is uploaded digitally using an import object that writes directly to the acQuire database. Uploaded results are reconciled after this import process utilising quality control (QC) objects within the acQuire 4 interface.

· No adjustment to assay data has been undertaken.

Location of data points

· Drill hole collar locations are surveyed using a GPS Real Time Kinematic (RTK) rover station correlating with the Hermosa project RTK base station and Global Navigation Satellite Systems with up to 1cm accuracy.

· In August 2023, the downhole survey tool switched to the Reflex OMNIx42 multi-shot survey tool with Earth rate delta recorded, and surveys are rejected and reshot if the delta is above a set threshold. From mid-August 2018 to end-August 2023, surveys were undertaken with a 'TruShot' single shot tool. In August 2019, downhole survey incidence was increased from every 76m and at the bottom of the hole to every 30m and at the bottom of the hole.

· The Hermosa project uses the Arizona State Plane (grid) Coordinate System, Arizona Central Zone, and International Feet. The datum is NAD83 with the vertical heights converted from the ellipsoidal heights to NAVD88 using GEOID12B.

· All drill hole collar and downhole survey data was audited against source data.

· Survey collars have been compared against a 1ft topographic aerial map. Discrepancies exceeding 1.8m were assessed against a current aerial flyover and the differences attributed to surface disturbance from construction development and/or road building.

· Survey procedures and practices result in data location accuracy suitable for the information disclosed in this announcement.

Data spacing and distribution

· Drill hole spacing ranges from 10m to 500m. The spacing supplies sufficient information for geological interpretation and mineral resource estimation.

· Drill holes are composited to nominal 5ft (1.5m) downhole composites.

Orientation of data in relation to geological structure

· Mineralisation varies in dip. 30°NW in the upper Taylor Sulphide 20°N and 30°N in the lower Taylor Deeps.

· Drilling is oriented at a sufficiently high angle and close drill spacing to allow for accurate representation of grade and tonnage using three-dimensional modelling methods.

· There is indication of sub-vertical structures, conduits for or offsetting mineralisation, which have been accounted for at a regional scale through the integration of mapping and drilling data. Angled, oriented core drilling introduced from October 2018 is designed to improve understanding of the relevance of structures to mineralisation as well as the implementation of acoustic televiewer capture in 2020.

Sample security

· Samples are tracked and reconciled through a sample numbering and dispatch system from site to the ALS sample distribution and preparation facility in Tucson or other ALS preparation facilities as needed. The ALS LIMS assay management system provides an additional layer of sample tracking from the point of sample receipt. Movement of samples from site to the Tucson distribution and preparation facility is currently conducted through contracted transport. Distribution to other preparation facilities and Vancouver is managed by ALS dedicated transport.

· Assays are reconciled and results are processed in a secure database (acQuire) which has password and user level security.

· Core is stored in secured onsite storage prior to processing. After sampling, the remaining core, returned sample rejects and pulps are stored at a purpose-built facility that has secured access.

· All sampling, assaying and reporting of results are managed with procedures that provide adequate sample security.

Audits or reviews

· The FY26 Mineral Resource was externally audited by an independent consultant. The audit concluded that the information used in the resource estimation is managed to industry standard.

· The ALS laboratory sample preparation and analysis procedures were audited by internal South32 Geoscientists during the drilling campaign with no significant issues identified. Outcomes of the audit were communicated to ALS and recommendations implemented.

· Recent changes to improve duplicate performance by increasing the size of sub-sample splits and pulverising volumes have been implemented.

Mineral tenement and land tenure status

· The Hermosa project mineral tenure (Annexure 2 - Figure 1 and Figure 2) is secured by 30 patented mining claims totalling 228 hectares that have full surface and mineral rights owned fee simple. These claims are retained in perpetuity by annual real property tax payments to Santa Cruz County in Arizona and have been verified to be in good standing until 31 December 2026.

· The patented land is surrounded by 2,505 unpatented lode mining claims totalling 19,225 hectares. These claims are retained through payment of federal annual maintenance fees to the Bureau of Land Management (BLM) and filing record of payment with the Santa Cruz County Recorder. Payments for these claims have been made for the period up to their annual renewal on or before 1 September 2026.

· Title to the mineral rights is vested in South32's wholly owned subsidiary South32 Hermosa Inc. No approval is required in addition to the payment of fees for the claims.

· AMI purchased the project from ASARCO, but no legacy royalties, fees or other obligations are due to ASARCO or its related claimants (i.e. any previous royalty holders under ASARCO royalty agreements). At present, four separate royalty obligations apply to the Hermosa project (Annexure 2 - Figure 3):

o  Ozama River Corporation: A 2% NSR royalty payable by AMI to Ozama River Corporation (Ozama) for the future sale of all production minerals from certain identified claims.

o  Osisko Gold Royalties Ltd.: A 1% NSR royalty to Osisko Gold Royalties Ltd. (Osisko) on all sulphide ores of lead and zinc (and any copper, silver or gold recovered from the concentrate from such ores) in, under, or upon the surface or subsurface of the Hermosa project.

o  Bronco Creek Exploration, Inc.: A 2% NSR Allis Holdings Arizona.

o  LLC: A 1.5% NSR royalty on all production minerals extracted from three patented mining claims consisting of approximately 60.94 acres (24.66 hectares).

· In addition to the 30 patented mining claims with the surface and mineral rights owned fee simple, South32 Hermosa Inc. also owns other fee simple properties totalling 1,609 hectares which are not patented mining claims, and which are a mix of residential and vacant properties.

Exploration done by other parties

· ASARCO LLC (ASARCO) acquired the property in 1939 and completed intermittent drill programs between 1940 and 1991. ASARCO initially targeted silver and lead mineralisation near historical workings of the late 19th century. ASARCO identified silver-lead-zinc bearing manganese oxides in the manto zone of the overlying Clark deposit between 1946 and 1953.

· Follow up rotary air hammer drilling, geophysical surveying, detailed geological, and metallurgical studies on the manganese oxide manto mineralisation between the mid-1960's and continuing to 1991 defined a heap leach amenable, low-grade manganese and silver resource reported in 1968, updated in 1975, 1979 and 1984.

· In March 2006, AMI purchased the ASARCO property and completed a re-assay of pulps and preliminary SO2 leach tests on the manto mineralisation to report a Preliminary Economic Assessment (PEA) in February 2007. Drilling of RC and diamond holes between 2006 and 2012 focused on the Clark deposit (235 holes) and early definition of the of the Taylor deposit sulphide mineralisation (16 holes), first intersected in 2010. Data collected from the AMI 2006 campaign is the earliest information contributing to estimation of the Taylor deposit Mineral Resource. AMI drill programs between 2014 and August 2018 (217 diamond holes) focused on delineating Taylor deposit sulphide mineralisation, for which Mineral Resource estimates were reported in compliance to NI 43-101 (Foreign Estimate) in November 2016 and January 2018.

Geology

· The regional geology is set within Lower-Permian carbonates, underlain by Cambrian sediments and Proterozoic granodiorites. The carbonates are unconformably overlain by Triassic to late-Cretaceous volcanic rocks (Annexure 2 - Figure 4). The regional structure and stratigraphy are a result of late-Precambrian to early Paleozoic rifting, subsequent widespread sedimentary aerial, and shallow marine deposition through the Paleozoic Era, followed by Mesozoic volcanism and late batholitic intrusions of the Laramide Orogeny. Mineral deposits associated with the Laramide Orogeny tend to align along regional NW and NE structural trends.

· Cretaceous-age intermediate and felsic volcanic and intrusive rocks cover much of the Hermosa project area and host low-grade disseminated silver mineralisation, epithermal veins and silicified breccia zones that have been the source of historic silver and lead production.

· Mineralisation styles in the immediate vicinity of the Hermosa project include the carbonate replacement deposit (CRD) style zinc-lead-silver base metal sulphides of the Taylor deposit and the lateral skarn-style copper-zinc-lead-silver Peake deposit, and an overlying manganese-zinc-silver oxide manto deposit of the Clark deposit (Annexure 2 - Figure 5, Figure 6, and Figure 7).

· The Taylor deposit comprises the overlying Taylor Sulphide and Taylor Deeps domains separated by a thrust fault.

· The north-bounding edge of the thrusted carbonate rock is marked by a thrust fault where it ramps up over the Jurassic/Triassic 'Older Volcanics' and 'Hardshell Volcanics'. This interpreted pre-mineralising structure that created the thickened sequence of carbonates also appears to be a key mineralising conduit. The thrust creates a repetition of the carbonate formations below the Taylor Sulphide domain, which hosts the Taylor Deeps mineralisation.

· The Taylor Deeps mineralisation dips 10°N to 30°N, is approximately 100m thick, and primarily localised near the upper contact of the Concha Formation and unconformably overlying Older Volcanics. Some of the higher-grade mineralisation is also accumulated along a westerly plunging lineation intersection where the Concha Formation contacts the Lower Thrust. Mineralisation has not been closed off down-dip or along strike.

Drill hole information

· The Taylor deposit drill hole information, including tabulations of drill hole positions and lengths, is stored within project data files created for this estimate on a secure server.

· Hole depths vary between 15m and 2075m and have been collared across the patented land block (Annexure 2 - Figure 8).

Data aggregation methods

· Data is not aggregated other than length-weighted compositing for grade estimation.

Relationship between mineralisation widths and intercept lengths

· Vertical (90-85 degrees dip) and angled drilling is used in the creation of the geology model. For vertical holes, where they intersect the low to moderately dipping (30 degree) stratigraphy, the intersection length can be up to 15% longer than true width.

· Since August 2018, drilling has been intentionally angled between 60 and 85 degrees to maximise the angle at which mineralisation is intersected.

· The mineralisation is modelled in 3D to appropriately account for sectional bias or apparent thickness issues which may result from 2D interpretations.

Diagrams

· Relevant maps and sections are included with this announcement.

Balanced reporting

· Exploration results are not specifically reported as part of this disclosure.

Other substantive exploration data

· Aside from drilling, the geological model is compiled from local and regional mapping, geochemistry sampling and analysis and geophysical surveys. Metallurgical test work, specific gravity sampling and preliminary geotechnical logging have contributed to evaluating the potential for reasonable economic extraction at a scoping study level.

Further work

· Planned elements of the resource development strategy include extensional and infill drilling, all oriented and logged for detailed structural and geotechnical analysis, sample representivity determination, comprehensive specific gravity sampling and moisture analysis, further geophysical, geochemical and geotechnical analysis, and structural and paragenesis studies.

Database integrity

· Drill hole data is stored in an internally hosted database hosted on South32's Azure environment. Collar, survey, sample dispatch data and analytical results are uploaded from csv files as they become available. The upload process includes validation checks for consistency and anomalous values.

· Digital logging was implemented in October 2018 and continued with an internally hosted web application whereby this data is generated as csv files for upload and validation.

· All logging is peer reviewed by experienced geologists against core photos and in the context of surrounding geological interpretation as part of update of the geological model.

Site visits

· The Competent Person has reviewed the Taylor deposit Mineral Resource Estimates and visited the site regularly as a full-time employee of the company prior to recent retirement.

· The site visit objectives are to understand all inputs and processes contributing to the FY26 Mineral Resources including core drilling, changes in core logging procedures, digital core logging, database audits and resampling programs to improve confidence in geological interpretation, density estimation and geometallurgical inputs.

· The Competent Person discussed sample preparation and laboratory procedures with ALS representatives to ensure that these procedures are applied.

· The findings of site visits indicate the data and procedures are of sufficient quality for Mineral Resource estimation and reporting. Review and required improvement are continuously discussed and required changes are implemented.

Geological interpretation

· 'Mineralisation domains' are created within bounding lithologies using indicator modelling methods of the cumulative in situ value of metal content. The metal content descriptor, "Metval" and "Oxval", is calculated by summing the multiplication of economic analyte grades for Mn, Zn, Pb, Cu and Ag, price, and recovery. Metval and Oxval cut-off ranges for mineralisation domains ranged from US$7-50 for the different litho-structural domains. Material above the Metval and Oxval cut-off is modelled utilising the indicator numerical model function in Leapfrog Geo™ to create volumes.

· Indicator models are guided using geologic trends based on modeled lithologic contacts and structures within a post mineralisation fault block model. Constraints on these domains include known bounding structures, stratigraphy, and manually digitised limits on the extents of mineralisation. In addition to drill hole data, historic underground mine plans and mapping and surface geologic mapping is used to help extend geologic features to the topography. The purpose of these domains is to provide mineralised volumes within the larger lithologic boundaries, and to ensure relevant geological controls and constraints are considered. Indicator cut-offs are selected to create continuous volumes consistent with the overall modelling approach for a CRD-style of mineralisation.

· Mineralised domains are evaluated against multiple indicator scenarios for parameters such as inherent dilution, exclusion, and volumetric changes to balance these parameters with understood continuity of mineralisation from site geological staff interpretation.

· Alternate geological interpretations have not been used, however, the model is evolving as new data is collected.

Dimensions

· The mineralising system is yet to be fully drilled in multiple directions. The Taylor sulphide mineralisation is constrained up-dip where it transitions to oxide mineralisation, representing a single contiguous mineralised system. Taylor is open in multiple directions.

· The north-bounding edge of the thrusted carbonate rock is marked by a thrust fault where it ramps up over the Jurassic/Triassic 'Older Volcanics' and 'Hardshell Volcanics'. This interpreted pre-mineral structure that duplicated and thickened the sequence of carbonates also appears to be a key conduit for mineralisation.

· The Taylor Sulphide Deposit has an approximate strike length of 2,500m and width of 1,900m. The stacked profile of the thrusted host stratigraphy extends 1,200m from near-surface and is open in several directions (Annexure 2 - Figure 6, Figure 7 and Figure 8).

Estimation and modelling techniques

· Geologic modelling and grade estimations use Leapfrog Geo™ and Maptek Vulcan, respectively.

· Elemental estimation includes Zn, Pb, Ag and Cu. As, Sb, Na, K, Bi, Mn and Mg are estimated as potential deleterious analytes and Fe, Ca, S and Mg are estimated as tonnage inputs.

· The specific gravity is also estimated using a restricted search guided by geologic trends.

· Estimation and modelling techniques reflect the interpreted structural and lithological controls on mineralisation apparent in the core and data. These align with the current understanding of the formation of CRD-style mineralisation. Key assumptions include:

o  The relative importance of structure and lithology in either facilitating or constraining the deposition of mineralisation;

o  Geological domaining according to these controls; and

o  All boundaries are considered 'hard'.

· Search orientations are aligned with mineralised structures and lithological contacts using locally varying anisotropy to assign directions on a block-by-block basis. Search distances and variography parameters are interpolated into 'parent' blocks of 9m by 9m by 4.5m from 3D geological wireframes taken from the geological model.

· Assay data is composited to a nominal interval of 1.5m within mineralisation domains for the purpose of exploratory data analysis to derive estimation parameters for ordinary kriging.

· To manage the risk of local grade overestimation, high-grade outliers in the drill holes are capped prior to compositing. Cap values are determined using log probability plots for each domain. Selected thresholds are typically above the 99.5 percentile where the distribution or sample support deteriorates and to minimise the co-efficient of variation. No bottom caps are applied.

· The outputs of geostatistical analysis, including variography and quantitative kriging neighborhood analysis (QKNA), are used to optimise grade estimation parameters. This includes search distances, sample selection criteria, and block dimension. A parent block size of 9m by 9m by 4.5m is selected, relative to a data spacing of between 25m and 150m but typically approximately 50m within the core of mineralisation allows for mining study selectivity within the minimum selective mining unit (SMU) dimension.

· Sub-cells to a 1.5m minimum are built along the contacts of the estimation domains to reduce the volume variance between wireframe models and the orthogonal block model.

· The dimensions of the anisotropic search ellipses for each estimation pass are matched to the ranges of the first and second structures of the variograms per domain using ranges of the overall structure of grade continuity for the zinc variogram models. The search ellipse ranges vary between estimation domains but remain the same for all elements within individual domains. While related elements (Pb-Ag, Pb-Zn, Ag-Zn) are not co-kriged, their correlated nature is validated to be preserved in block estimates.

· Minimum and maximum sample criteria, an octant search strategy and a restriction of samples used from each drill hole are applied to help reduce local grade bias. A second search pass, set at the entire range of the zinc variogram, is used to estimate lower confidence areas of the model.

· Kriging tests with visual and statistical validation of results indicate the appropriateness of an initial top cap applied, which is then adjusted up or down to counter any introduced global bias. The degree of grade smoothing between data and block values is analysed through comparison of mean differences, histograms, q-q plots, and swath plots.

· Classification criteria constrain the reporting of estimates to within demonstrated grade and geological continuity ranges. As all estimation passes rely on at least two holes to inform the estimate, there is no extrapolation from single holes in any classified material.

· The appropriateness of estimation techniques contributes to the high confidence estimation outcome achieved in areas of data spacing within the full ranges of grade continuity.

· The grade estimations are compared against previous estimates and reviewed locally for differences in data/interpretation, as well as globally using graded tonnage plots and waterfall analysis.

· The Mineral Resource is reported for Zn, Pb and Ag, without any assumptions relating to recovery of by-products.

Moisture

· Based on logging observations and pre- and post-dried sample weights tested by ALS on assay samples from July 2019 to February 2022 on over 50,000m, moisture content of the core is minimal. A dry bulk density is assumed for estimation and reporting purposes.

Cut-off parameters

· NSR reporting cut-off values are based on relevant project study operational costs and pricing scenarios. Application of a nominal lower limit of breakeven economics from these costs is considered to have reasonable prospects for eventual economic extraction under current economic modelling.

· The calculations for each block are used to determine resource block cut-off according to variability of physical costs such as logistics, treatment and refining costs, and economic factors such as metal pricing.

· The NSR cut-off values for reporting the FY26 Taylor Sulphide Deposit Mineral Resource is US$90/dmt for material considered extractable by underground open-stope methods.

· The input parameters for the NSR calculation include South32 long-term forecasts for manganese, zinc, lead, copper and silver pricing, haulage, treatment, shipping, handling, and refining charges.

· NSR considers the remaining gross value of the in situ revenue generating elements once processing recoveries, royalties, concentrate transport, refining costs and other deductions have been considered.

Mining factors or assumptions

· Underground mining factors and assumptions are based on feasibility level project studies and are calibrated against South32's Cannington zinc, lead, and silver mine production. Longhole stopes on a sub- or full-level basis with subsequent paste backfill is the assumed mining method.

· Reasonable prospects for eventual economic extraction are determined through assessment of the model at scoping, feasibility study/pre-feasibility study levels using processes ranging from stope optimisation and mine scheduling through to detailed financial modelling.

Metallurgical factors or assumptions

· The NSR block value incorporates metallurgical recovery based on test work for composite and individual mineralisation domains.

· Total metallurgical recovery assumptions for sulphide are domain dependent and as follows: Zn (85%-92%), Pb (89%-92%) and Ag (76%-83%).

Environmental factors or assumptions

· Feasibility level environmental assumptions, including waste and process residue disposal options, are factored into physical and financial modelling used to evaluate reasonable prospects for eventual economic extraction.

Bulk density

· Dry bulk density is estimated for mineralisation domains where data density is sufficient to estimate zinc on the first pass. Zinc variograms and first pass search criteria are applied to density measurements. The current database records 26,394 specific gravity (SG) measurements.

· SG was originally calculated beyond the range of the first pass using Zn, Pb, Ag, Fe, Ca and Mg using a regression formula. Measurements from previous campaigns, small numbers of which were taken from sulphide and oxide mineralisation in carbonates, are excluded from the analysis as assaying did not include the full complement of elements used for the regression formulae.

· A final pass of assigned average density values is applied to fill blocks on the outskirts that did not have grade in them.

· Historically, SG measurements were taken from an approximate 20cm representative section of competent core within a 1.5m sample interval. Since May 2021, to improve the SG regression analysis the SG measurements are broken out with an associated assay interval greater than 60cm. The measurement technique uses the core weight in air and weight immersed in water to determine a specific gravity. Routine calibration of scales and duplicate measurements are undertaken for quality control.

· The core is not oven dried or coated to prevent water ingress prior to immersion unless porosity is noted in the sample, in which case the core was coated in plastic film.

· Lithology outside of mineralisation domains have an average bulk density assigned by rock type.

Classification

· Mineral Resource classification criteria are based on the level of data informing the geological model and grade estimation.

· Classification is achieved by manual selection of blocks within a triangulation designated by the Competent Person. The triangulation is a smoothed version of a model calculation field.

· The calculation used to guide the Competent Person in creation of the triangulation overlays grade estimation confidence indicators, such as kriging variance, on block estimation conditions that relate to the number and distance of data informing the estimate in relation to semivariogram models for Mn, Zn, Pb, Cu and Ag.

· Classification criteria are determined on an individual estimation domain basis:

o  Measured Mineral Resource classification approximates an area of high geological modelling confidence that has block grades for Mn, Zn, Pb and Ag informed by a high number of data sourced within first pass search radii. The block is also interpolated from data within a range equivalent to 'two-thirds' of the variogram range.

o  Indicated Mineral Resource classification meets similar conditions to that of the Measured, except data spacing criteria are expanded to ranges matching the final range in variography. Search ranges constraining this classification are typically around 150m for Sulphide.

· Estimated blocks exceeding prior criteria are classified as an Inferred Mineral Resource up to about 250m from contributing data.

· The FY19 through FY25 geological models were developed internally by South32. Estimation up to FY23 has been a collaboration with SRK and South32 geology staff, with internal South32 estimation starting in FY24. Peer review at various stage gates of the modelling and estimation process was conducted by South32.

Audits or reviews

· The FY26 Mineral Resource estimate was reviewed by an Independent Consultant. The outcome suggests the model is appropriate for mine planning and reporting purposes. The recommendations will be attended to in the next resource update.

Discussion of relative accuracy/confidence

· Geological modelling is at a level where there is a moderate to high degree of predictability of the position and quality of mineralisation where infill drilling is being conducted. Geostatistical analysis indicates a low nugget effect, and ranges of grade continuity are beyond drill spacing in Measured and Indicated areas of the deposit.

· Measured Resources of the FY26 Taylor deposit Mineral Resource global estimate are expected to be within 15% accuracy for tonnes and grade when reconciled over any production quarter using mining assumptions matched to the determination of reasonable prospects for eventual economic extraction. Indicated Mineral Resource uncertainty should be limited to ±30% quarterly and ±15% on an annualised basis. Inferred Mineral Resources are expected to be converted to higher confidence classifications before extraction.

· The Competent Person is satisfied that the accuracy and confidence of the Mineral Resource estimation is well established and reasonable for the deposit.

Mineral Resource estimate for conversion to Ore Reserves

· The Ore Reserve estimation is based on 57Mt of Measured and 86Mt of Indicated Mineral Resources as at 30 April 2026. The Mineral Resource estimate has been updated and reported as part of this disclosure.

· Mineral Resources are inclusive of Ore Reserves.

Site visits

· The Competent Person is a full-time employee of South32 and works as the Manager of Project Strategy & Performance for Hermosa (site and Tucson office). The Competent Persons reviewed all input that has been used as modifying factors including understanding of legal and environmental assessment.

Study status

· A feasibility study (FS) was completed for the Taylor deposit in 2023 in compliance with the AACE International Class 3 cost estimation standard. The study was reviewed in accordance with South32's internal processes to validate all inputs and outcome.

· A technically achievable and economically viable mine plan was developed as part of the FS.

· Additional work has been performed since FS, including detailed engineering as part of project execution.

· All modifying factors have been reviewed based on the additional work and are included in this announcement.

Cut-off parameters

· Taylor is a polymetallic deposit which uses an equivalent NSR as grade descriptor. NSR considers the remaining gross value of the in situ revenue generating elements once processing recoveries, royalties, concentrate transport, refining costs and other deductions have been considered.

· The elements of economic interest used for cut-off determination include silver, lead and zinc.

· The cut-off strategy employed at Taylor is to optimise the NPV of the operation. All material assumptions used to calculate NSR values are included in this announcement.

· A variable NSR cut-off grade was used in the development of mineable stope shapes. Early mining areas, Zones ABCD, designed stope shapes with a minimum of US$100/tonne. Mid-mine life mining areas, Zone FG, designed stope shapes with a minimum of US$95/tonne. Late mining areas, Zones EHJ, designed stope shapes with a minimum of US$80/tonne.

· After development design and scheduling was completed, all stopes with an NSR less than US$90/tonne were excluded from the mine plan.

Mining factors or assumptions

· The mining method applied is longhole open stoping with paste backfill. This is the preferred mining method based on a combination of orebody geometry, productivity, cost, resource recovery and risk of surface subsidence. (Annexure 2 - Figure 9: Mine design).

· Geotechnical recommendations based on deposit geology, geotechnical data, and numerical modelling have been used to develop the stope shape dimensions and preferred stope extraction sequence.

· There are three areas of varying stope dimensions in the Taylor mine design. Above the Taylor thrust fault, stope dimensions are 27.4m high, 22.9m wide and between 15.2m and 36.6m long. Below the Taylor thrust level, spacing remains at 27.4m but stope widths are reduced to 19.8m in accordance with geotechnical modelling. Above the 1,122m elevation, stope dimensions have been reduced to 19.8m high by 10.7m wide where appropriate, to be more selective as the sulphide and oxide ore bodies overlap.

· Mining dilution was derived from extensive geotechnical modelling. An in situ stress model was developed during the FS and was used to quantify anticipated slough based on rock mass properties, in situ stress, stope dimensions, and extraction sequencing. Internal ore dilution was ignored and average external waste and backfill dilution were calculated and applied to each stope. This methodology has remained unchanged since the previous declaration.

· Stopes identified for the Ore Reserve estimation were created using Deswik-SO (Stope Optimizer) without a limit on waste that could be included in the stope shape. An analysis was completed on the stope shapes created and it was found that 17% of tonnes within the stope shapes have blocks with NSR grades less than US$20/tonne, representing a secondary cut-off. This material could be optimised in short-range mine planning and is considered as internal dilution within the reserve inventory.

· The mining recovery factor is based on the stope dimension and ranges from 95% to 96%, with the greatest number of stopes having the 96% factor. The recovery factor was applied to all stope tonnes.

· Inferred Mineral Resources were included in the development of the mine plan. Inferred Mineral Resources were considered as diluting material or waste. The total Inferred Resources considered in the mine plan constitutes 1% of the total tonnes.

· Primary access to the orebody will be through one of two shafts. Ore passes, haulage levels and ventilation raises will be established to move material internally within the mine and to provide ventilation and cooling. Secondary access is achieved via continuing the existing decline from surface to both the 3,680L and 2,550L stations.

· Underground mining equipment selected for use includes jumbo development drills, ground support drills, LHD underground loaders, haul trucks, and LH drills. This prime fleet is industry standard for this mining method.

· Backfill of open voids will consist of waste rock or cemented paste backfill. Paste backfill will be produced in a surface backfill plant and distributed underground via a backfill reticulation system.

· The proposed mining method with modifying factors applied supports a ramp up to the preferred mine plan of up to 4.3Mt per annum.

Metallurgical factors or assumptions

· The Taylor process plant will consist of well-established processing techniques. Primary crushing will be conducted underground, and crushed ore will be hoisted to the surface. Grinding will be conducted by a primary AG mill, secondary vertical tower mill, and pebble crusher, to a size suitable for flotation. Sequential flotation will be followed by pressure filtration for concentrates and tailings.

· Metallurgical test work has been conducted using samples which cover the orebody vertically and horizontally. Process design was developed based on the results from test work and has been reviewed by independent consultants.

· Total metallurgical recovery assumptions differ between geological domains ranges from 85% to 92% for Zn, 89% to 92% for Pb, and 76% to 83% for Ag.

· Lead is found to occur primarily as galena and zinc is found to occur primarily as sphalerite, with small amounts of non-sulphide zinc occurring in the geological domains close to surface. Galena and sphalerite are coarse grained and easily liberated for effective recovery by sequential flotation.

· Manganese occurs in relatively high concentrations in gangue and can occur as an inclusion of sphalerite especially in the higher geological domains. This can cause manganese in zinc concentrate to exceed penalty limits for most smelters. No other deleterious elements are expected to exceed penalty limits for lead or zinc concentrates.

· Metallurgical test work programs have included:

o  Comminution - crushing work index (CWi), rod work index (RWi), SAG power index (SPi), Bond ball mill work index (BWi), abrasion index (Ai), high-pressure grinding rolls (HPGR), SMC and JK drop weight tests, low-impact energy test (formerly crushing work index), MacPherson autogenous grindability test, and advance media competency tests (AMCT);

o  Flotation - rougher variability, rougher and cleaner kinetics, primary grind size variability, regrind size variability, conventional locked cycle tests, dilution cleaner and dilution locked cycle tests (Jameson cell amenability);

o  Preconcentration - heavy media separation followed by flotation on HMS concentrates and rejects and ore sorting;

o  Stockpile oxidation simulation;

o  Humidity cell testing;

o  Cyanide destruction; and

o  Solid-liquid separation testing.

· Metallurgical test work has been conducted at discrete drill hole intervals to capture the full variability of the orebody as well as on composite samples. Samples were selected from all geological domains and cover the orebody vertically and horizontally.

Environmental factors or assumptions

· The project consists of patented claims surrounded by the Coronado National Forest and unpatented claims located within the surrounding Coronado National Forest and managed by the United Sates Forest Service.

· A permitting schedule has been developed for obtaining all critical state and federal approvals consistent with South32's Annual Declaration of Resources and Reserves in the Annual Report published on 28 August 2025. A further schedule consistent with this updated declaration will be developed in due course as planning efforts advance.

· Waste rock generated from surface and underground excavations is delineated into potentially acid generating (PAG) or non-acid generating (NAG) rock. As often as practical, waste rock excavated underground will remain underground for use as backfill. All PAG material not being used as backfill will report to a lined facility. NAG material not being used as backfill will be placed in surface stockpiles or within the lined facilities, except for a limited amount that will be used for construction material.

· The tailings storage facilities have been designed in accordance with South32's Dam Management Standard and are consistent with the International Council on Mining and Metals (ICMM) Tailings Governance Framework, in addition to the Australian National Committee on Large Dams (ANCOLD) guidelines.

· Tailings from processing will be filtered and stored in purpose-built, lined, surface storage facilities or returned underground in the form of paste backfill. An existing tailings storage facility on patented claims will be used to store tailings from early operations.

Infrastructure

· Current site activity is supported by and consists of office buildings, core processing facilities, existing tailings storage facility, water treatment plants, dewatering wells, ponds, road network and laydown yards.

· Planned infrastructure currently in construction, or that will be installed to support future operations, will consist of:

o  Dual shafts;

o  Decline extension (of exploration decline);

o  Ventilation and refrigeration systems;

o  Process comminution, flotation and concentrate loadout;

o  Tailings filtration plant and tailings storage facilities;

o  Paste backfill plant;

o  Dewatering wells and pipelines;

o  Surface shops, fuel bays, wash bays and office buildings;

o  Powerlines and substations;

o  Surface stockpile bins; and

o  Underground maintenance shops and ore and waste storage.

· A site layout plan and construction schedule support the above listed infrastructure.

Costs

· The capital cost estimate is supported by sufficient engineering scope and definition for preparation of an AACE International Class 2 cost estimate.

· The operating cost estimate was developed in accordance with industry standards and South32 project requirements.

· Mining costs were calculated primarily from first principles and were substantiated by detailed labour rate calculations and vendor-provided equipment operating costs. Materials and consumables costs were escalated from the feasibility study's budgetary quotations by 6% and applied on a first principles basis.

· Processing costs account for plant consumables and reagents, labour, power and maintenance materials and tailings storage facility costs.

· General and administrative costs are based on current operating structures and have been optimised based on industry benchmarks and fit-for-purpose sizing. Permitting and environmental estimates are based on current permitting timelines.

· Long-term commodity price forecasts for silver, lead and zinc, and foreign exchange rates, are based on South32 internal analysis. Long-term price protocol reflects South32's view of demand, supply, volume forecasts and competitor analysis.

· Transportation charges have been estimated using information on trucking costs, rail costs, export locations, transload capabilities and transit time associated with moving concentrate from site to port to market.

· Treatment and refining charges used for valuation are based on a long-term view of the refining costs and metal prices for zinc concentrate and an average consensus view for lead concentrate.

· Applicable royalties and property fees have been applied using current private royalty agreements.

Revenue factors

· The life of operation plan provides the mining and processing physicals such as volume, tonnes and grades, to support the valuation.

· Revenue is calculated by applying forecast metal prices and foreign exchange rates to the scheduled payable metal. Metal payability is based on contracted payability terms typical for the lead and zinc concentrate markets.

Market assessment

· The South32 price protocols reflect its view on demand and supply, including customer analysis, competitor analysis, identification of major market windows and volume forecasts.

Economic

· Economic inputs are described in the cost, revenue, and metallurgical factors commentary. Key economic assumptions are assessed in ranging workshops with project and industry leaders to ensure base case assumptions are appropriate.

· Sensitivity analyses have been completed on metal prices, metallurgical recoveries, mine operating costs, growth capital costs and use of Inferred Mineral Resources to understand the value drivers and impact on valuation.

· Sensitivities were evaluated to assess the impact of changes in mineable tonnes and head grades, initial capital expenditure, project execution schedule, production ramp up period, steady-state production rate, metallurgical recoveries, mining and processing operating costs, refining costs, metal prices, and local and federal tax policy.

Social

· South32 maintains relationships with stakeholders in its host communities through structured and meaningful engagement including community forums, industry involvement, employee participation, local procurement and local employment.

· A community management plan has been developed in accordance with the South32 Social Performance Standard and includes baseline studies, community surveys, risk assessments, stakeholder identification, engagement plans, cultural heritage, a community investment plan and closure and rehabilitation.

Other

· Hermosa has developed a comprehensive risk register and risk management system to address foreseeable risks that could impact the project and future operations.

· An assessment of physical climate risks(a) in 2022 identified climate hazards of concern for Hermosa including extreme rainfall and flooding events, drought, increased wildfires and more extreme temperatures. However, the 2022 assessment did not identify any material change to Hermosa's risk profile as a result of considering the physical impacts of climate change.

· No other material naturally occurring risks have been identified and the project is not subject to any material legal agreements or marketing arrangements.

· The inclusion of Hermosa in the FAST-41 process is expected to make federal permitting more efficient and transparent, supporting the attainment of federal permits. The current, published date for a federal permitting decision is in July 2026 and the Mine Plan of Operation (notice to proceed) in September 2026.

Classification

· Proved Ore Reserve is derived from Measured Mineral Resource and Probable Ore Reserves is derived from Indicated Mineral Resource. Internal dilution within Ore Reserve stope boundaries represents 17% of the Ore Reserve by mass and is considered to have the same level of confidence as the reported Mineral Resource.

· Inferred Mineral Resources are used to define the economic mining limits but are excluded from the Ore Reserve estimate. The Taylor deposit is well understood through drilling as defined by the high percentage of Proved and Probable Ore Reserve.

· Ore Reserves are classified and reported in accordance with the JORC Code guidelines. Modifying factors including stope size, stope geometry, geotechnical parameters, mining cost, processing cost, metallurgical recovery, transportation and refining costs and royalty fees have been applied accordingly.

· The Ore Reserve classifications reflect the Competent Person's view of the deposit.

Audits or reviews

· An independent audit was completed by an independent consulting firm. The following areas were identified to be considered in future Ore Reserve updates:

o  Create procedures and processes for variances prior to commencing production

o  Revisit recovery factors of small stope subshapes

o  Revise cut-off grade strategy in future planning processes to reflect changes in metal price and operating costs

Discussion of relative accuracy/confidence

· Ore Reserve estimation techniques are robust and well understood. The estimates are global with local estimates plan to be achieved following grade control drilling during execution.

· Ore Reserves are based on a set of stopes of sufficient value to maintain a stable reporting platform and positive NPV over an expected range of modifying factors.

· Sensitivity analysis conducted on the feasibility evaluation considered external factors (variances to ROM head grade, foreign exchange, commodity prices, capital and operating costs, and mill recovery) and various internal factors. The resultant NPV is sensitive to commodity price.

· Sufficient studies, reviews, and audits have been conducted both internally and externally to confirm the modifying factors used.

· The Competent Person is comfortable that these estimates are tabulated in accordance with the JORC guidelines and are suitable for the reporting of Ore Reserves for the Taylor deposit.