QUARTERLY REPORT FOR THE PERIOD ENDING 31 MARCH 2022

Pacific Nickel Mines Limited ( Pacific Nickel or the Company ) (ASX: PNM) is pleased to provide an update on its activities for the March 2022 Quarter. The Company's focus for the reporting period was the fast track development of the Company's Kolosori Laterite Direct Shipping Ore ("DSO") Nickel

Project in the Solomon Islands.

HIGHLIGHTS FOR THE MARCH 2022 QUARTER

• Successfully completed the Early Works program, including: 1

• Construction of infrastructure including an access road, camp

Terry Cuthbertson James Dean Geoff Hiller Rob Thomson

Pacific Nickel Mines Limited Level 4

Tel: +61 (0) 403 940 518 E: info@pacificnickel.com W: www.pacificnickel.com W: www.pacificnickel.com

• Excavation of a test pit to assess mining and stockpile designs and to calibrate grade control methods.

• Completion of a geotechnical assessment, including drilling of the proposed nickel DSO loadout wharf site.

• An assessment of quarry sites to provide materials for wharf and road construction.

• Advanced the Regulatory approval process for a Mining Lease.

• Continued discussions with several prospective off-takers and project financiers, with several indicative finance proposals received. 2

• Commissioned and received a DSO marketing study from specialist commodity research consultants CM Group. 3

• Progressed the Definitive Feasibility Study, which is scheduled to be completed early second quarter.

• Finalising the construction design of the wharf (which is the critical element of the Front End Engineering Design study being carried out by Resindo).

• Completed a Share Purchase Plan (SPP) to existing eligible shareholders of the Company raising a total of $340,500 4

1 ASX Announcement 03 March 2022 - Kolosori Nickel Project - Early Works Completed Successfully

2 ASX Announcement 01 April 2022 - Kolosori Nickel Project Update

3 ASX Announcement 10 March 2022 - Kolosori Nickel - Debt Financing & Nickel Marketing Study

4 ASX Announcement 05 January 2022 - Share Purchase Plan Completed

The Kolosori Nickel Project ("Project") is an advanced stage direct shipping ore nickel laterite project progressing to development located on Isabel Island in the Solomon Islands. The project has several positive aspects including its close proximity to the coast, no processing requirements, low capital route to direct shipping ore production and local landowner support. A development consent was received for the Kolosori Project in December 2021 and the Company is now awaiting determination of its application for a Mining Lease.

The Company is continuing to work through the regulatory approvals process and expects to receive a mining lease for the Kolosori Project shortly. We understand that the Solomon Islands Mines and Minerals Board has recently met to consider the Mining Lease Application for the development of the Kolosori Project. The timing for this meeting was delayed due to the outbreak of COVID-19 in the Solomon Islands in January 2022 and the resulting temporary closure of the Mines Department and other government departments. We understand that the Mines Department will now action the requirements of the Mines and Minerals Board to finalise the Mining Lease process.

The Company is currently finalising a Definitive Feasibility Study ("DFS") and the Front End Engineering Design ("FEED"). The Early Works Program, which was completed in March 2022, provided valuable input for the DFS and FEED.

Following a successful drilling program at the Kolosori Project during the end of 2021 and completion of a positive Scoping Study, the Company decided to fast-track the project development timeline by initiating an Early Works program. The program commenced in December 2021 and was completed in early March 2022.

The work was successfully led on site by the Company's General Manager Operations, Mike James in cooperation with Solomon Island consultants and contractors who are also likely to be involved in the construction and operation of the Project. The Company is pleased that the Early Works were able to be completed on time in the Wet Season under trying conditions whereas the Project will normally operate during the course of the Dry Season, which is typically from April to December.

The main components of the Early Works program included:

• Construction of infrastructure including an access road, camp site and stockpile site;

• Excavation of a test pit to assess mining and stockpile designs and to calibrate grade control methods;

• Completion of a geotechnical assessment, including drilling, of the proposed nickel DSO load-out wharf site; and

• An assessment of the quarry sites to provide construction materials for wharf and road construction.

Photo 1. Preparation of road from temporary base camp to initial Test Pit site

One of the key components of the Early Works program was the excavation of a test pit to assess mining and stockpile designs to calibrate grade control methods.

The exploration team completed a series of grade control holes in the test pit area where mining operations are likely to be conducted over the first 2 years of operations. The grade control holes were closely spaced (approximately 10m apart) and enabled a reconciliation of the block model grades and grade control drilling with grades from the mined material.

The material from the test pit was stockpiled so that moisture content could be analysed over time to measure its drying characteristics. As part of this analysis, some of the stockpiles are being covered with tarpaulins and some are left uncovered.

This test pit has also provided the Company with additional valuable information which will be used in the Definitive Feasibility Study (DFS), including: 5

• General suitability of the proposed mining equipment (including in wet conditions which may be encountered in the worst-case).

• Confirmation that the ore and overburden are free-dig and will not require blasting, which matches with initial conclusions from the exploration drill holes.

• Confirmation of preferred excavator and truck fleet requirements and associated data for the purpose of finalising aspects of the DFS and for ongoing discussions with potential mining contractors.

5 ASX Announcement 03 March 2022 - Kolosori Nickel Project - Early Works Completed Successfully

Approximately 6,000 tonnes of saprolite ore and 1,500 tonnes of transition saprolite were mined and stockpiled from the test pit.

Photo 2. Mining of Test Pits

Photo 3. Saprolite on Stockpile Pad

Photo 4. Test Pit with Lithology and Drill Hole Locations Marked

The primary geotechnical focus of the Early Works program was to carry out an assessment of the ground conditions at the wharf site to enable early construction of the wharf and associated facilities. Three geotechnical holes were drilled in the wharf area and the geotechnical team demobilised from site. The visual results from the drilling were consistent with expectations for the initial port design. 6

Results from this program have been fed into the DFS, which is currently being undertaken by the Company and design consultants Resindo Engineers.

6 ASX Announcement 09 February 2022 - Early Works Update - Kolosori Nickel Project

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Pacific Nickel Mines Ltd. published this content on 19 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 April 2022 23:14:01 UTC.