Mr. Keith Morrison reports

PREMIUM NICKEL RESOURCES LTD. REPORTS RESULTS OF SELKIRK METALLURGICAL STUDY, IDENTIFIES SIGNIFICANT PGE CONTENT IN CONCENTRATE

Premium Nickel Resources Ltd. (PNRL) has released the results of the 2021 metallurgical study completed at its 100-per-cent-owned Selkirk nickel-copper-cobalt-platinum-group-element (PGE) sulphide mine in Botswana.

The objective of this initial 2021 metallurgical study was to assess if readily marketable copper and nickel concentrates could be produced and, if so, at what metal recovery levels. The Selkirk test program followed a similar program conducted on samples from the Selebi mine, which demonstrated potential for these metallurgical objectives to be achieved.

Highlights of the metallurgical study include:

• Ability to produce salable market nickel and copper concentrates;
• Nickel concentrate grade of 10 per cent nickel and 6 per cent copper;
• Copper concentrate grade of 33 per cent copper and 0.32 per cent nickel;
• Recoveries of 63 per cent nickel and 85 per cent copper;
• Concentrates clean of deleterious elements and with low (less than 1 per cent) manganese oxide (MgO) levels;
• Attractive amounts of PGE present in the concentrates:
  • 36 grams per tonne (g/t) Pd in copper concentrate;
  • Nine g/t Pd in nickel concentrate.

Keith Morrison, chief executive officer, commented: "The results from the Selkirk metallurgical studies provide important support for our redevelopment plan to produce separate copper and nickel-cobalt commercial concentrates. Previous non-compliant economic studies at Selkirk by Tati Nickel Mining Company, were based on the production of a low-grade concentrate that would be transported approximately 185 kilometres to the Phikwe smelter formerly operated by BCL. The closing of the BCL smelter in 2015 was a primary contributor to the closure of the parastatal Ni-Cu-Co-PGE Tati Nickel Mining Company.

"This metallurgical study was an important step for PNRL to determine the potential value of the Selkirk deposit. This study also indicated the potential PGE content of the nickel and copper concentrates. We will continue to run additional metallurgical testing as the project moves forward and apply data driven best practices in all of our activities that are environmentally sound and that ultimately provide for a sustainable future."

The Selkirk mine is situated 28 kilometres south-east of the town of Francistown, and 75 kilometres north of the company's 100-per-cent-owned Selebi mine. The Selkirk mine was acquired through an asset purchase agreement with the liquidator of Tati Nickel Mining Company (see the news release dated Aug. 22, 2022). In addition to the metallurgical sampling, the company has been collecting additional information and conducting geological due diligence by examining the underground workings, reviewing mineralized drill core, collecting DGPS co-ordinates of drill collars and data verification of information in databases. The company intends to include these findings in its National Instrument (NI) 43-101 report, which is expected to be completed by the end of 2022.

Key results of the 2021 metallurgical study are summarized below. Further details including sample preparation, methodology, technical definitions and modal analyses, as well as liberation, association and exposure characteristics can be found in the report of SGS Canada, a copy of which is available on Premium Nickel Resources's website.

Samples used for the 2021 metallurgical study were collected from 2016 core (HQ: 63.5 millimetres), sawn in half, and sent to SGS Canada in Lakefield, Ont., where each sample was analyzed for nickel, copper and sulphur for the purpose of creating the low and high-grade composite samples for metallurgical testing.

At SGS Canada, low-grade composites and high-grade composites were prepared from semi continuous intervals to represent potential open pit and underground ore types. The low-grade composite had 36, approximately one-metre intervals from 63.24 metres downhole to 136.37 metres; the high-grade composite had 20, approximately one-metre intervals from 126.67 metres to 176.67 metres. The grades of the two composites are shown in the "Head assays for PNRL test program" table.

A subsample from each of the low-grade composite and the high-grade composite was submitted for QEMSCAN (quantitative evaluation of minerals by scanning electron microscopy) mineralogy at a grind size of 80 per cent passing 129 micrometres and 99 micrometes, respectively. The major sulphide minerals were identified as chalcopyrite, pentlandite (Pn) and pyrrhotite (Po), with trace amounts of pyrite. About 80 to 85 per cent of the nickel was contained in pentlandite; the remaining nickel 12 to 15 per cent was mostly hosted by pyrrhotite in solid solution. Minor amounts of nickel (approximately 3 per cent) were hosted by non-sulphide gangue minerals. The Po:Pn ratio was approximately 10:1.

The liberation of chalcopyrite was good for both composites, with 74 to 83 per cent free and liberated, but pentlandite was poorly liberated, with 46 to 55 per cent free and liberated, at the grind size submitted for mineralogy. Pentlandite liberation was poor above 53 microns and very good for the minus 20 micron fraction. The use of regrinding is critical to fully liberate flame pentlandite from pyrrhotite to maximize the nickel recovery and grade.

A full suite of comminution tests were conducted on the two composites. The Selkirk samples were confirmed to be considered hard to very hard.

A limited number of batch tests were conducted prior to locked cycle testing (LCT) to demonstrate the process and provide a metallurgical projection for the low-grade sample. The locked cycle test is a series of batch laboratory tests conducted in sequence to simulate plant results. The "Combined LCT-4 and LCT-5 results for the Selkirk low-grade sample -- metallurgical projection" table shows the test results at each stage.

Nickel concentrate (combined copper rougher scavenger tails and pyrrhotite third cleaner concentrate), having a grade of 10 per cent nickel and containing approximately 6 per cent copper, was achieved. The nickel recovery was reasonably good at 63 per cent.

The recovery of copper was reasonable, achieving 55 per cent to the copper concentrate and 85 per cent recovery between the two concentrates. High-grade copper concentrate was achieved at 33 per cent copper. The low nickel content (0.32 per cent nickel) in the copper concentrate was also achievable.

Attractive amounts of platinum group elements were present in the concentrates with no obvious deleterious elements. The flotation test work also demonstrated that a pyrrhotite rougher scavenger tailings with a low sulfur content (less than 1 per cent) was achievable. It is notable that this was a quickly executed test program aimed at demonstrating what level of metallurgy may be possible.

Total recoveries are obtained by adding the distributions in the two concentrates.

The copper and nickel concentrates were found to be clean with little MgO (less than 1 per cent) nor minor deleterious elements (that is, arsenic, bismuth, Pb, selenium, tellurium, chlorine, fluorine and mercury) close to penalty levels. The Cu scavenger tail assayed 0.64 per cent cobalt, which is well into the payable range for nickel concentrates. The Co level in the copper concentrate was very low, at 176 g/t.

The current program was an acceptable demonstration of what the metallurgy could be for the Selkirk deposit. It is envisioned that there will be three to four more phases in metallurgical development.

Qualified person

The scientific and technical content of this news release has been reviewed and approved by Phillip Mackey, PhD, PEng, metallurgical consultant, who is a qualified person for the purposes of National Instrument 43-101 -- Standards of Disclosure for Mineral Projects.

QA/QC (quality assurance/quality control)

SGS Minerals Lakefield is accredited to the requirements of ISO/IEC 17025 for specific tests, as listed on its scope of accreditation, including geochemical, mineralogical and trade mineral tests.

About Premium Nickel Resources Ltd.

Premium Nickel Resources is a Canadian company dedicated to the exploration and development of high-quality nickel-copper plus cobalt resources. Premium Nickel Resources believes that the medium to long-term demand for these metals will continue to grow through global urbanization and the increasing replacement of internal combustion engines with electric motors. Importantly, these metals are key to a low-carbon future.

Premium Nickel Resources maintains a skilled team with strong financial, technical and operational expertise to take an asset from discovery to exploration to mining.

Premium Nickel Resources has focused its efforts on discovering world-class nickel sulphide assets in jurisdictions with rule-of-law that fit a strict criteria that comply with Premium Nickel Resources's values and principles which stand up and surpass the highest acceptable industry standards. Premium Nickel Resources is committed to governance through transparent accountability and open communication within the company's team and its stakeholders.

On Jan. 31, 2022, Premium Nickel Resources closed the acquisition of Premium Nickel Resources's flagship asset, the Selebi mine. The Selebi mine includes two shafts, (Selebi and Selebi North shafts) and related infrastructure (rail, power and water). Shaft sinking and plant construction started in 1970. Mining concluded in October, 2016, when the operations were placed on care and maintenance due to a failure in the separate and offsite processing facility. The Selebi mine was subsequently placed under liquidation in 2017.

The proposed work plan for the Selebi mine includes diamond drilling which is expected to continue for up to 18 months. During that time, additional metallurgical samples will be collected and sent for more detailed studies. The underground infrastructure at Selebi North will be upgraded to support an underground drilling program and to improve health and safety.

In addition, Premium Nickel Resources is evaluating direct and indirect nickel asset acquisition opportunities globally; it: (i) holds a 100-per-cent interest in the Selkirk mining licence and four prospecting licences in Botswana, (ii) holds a 100-per-cent interest in the Maniitsoq property in Greenland, which is a camp-scale permitted exploration project comprising 3,048 square kilometres covering numerous high-grade nickel-copper plus cobalt-sulphide occurrences associated with norite and other mafic-ultramafic intrusions of the Greenland Norite belt; (iii) holds a 100-per-cent interest in the Post Creek/Halcyon property in Sudbury, Ont., which is strategically located adjacent to the past producing Podolsky copper-nickel-precious metal sulphide deposit of KGHM International Ltd.; (iv) holds 100-per-cent ownership of property in the Quetico region near Thunder Bay, Ont.; and (v) is expanding its area of exploration interest into Morocco.

We seek Safe Harbor.