Barkly Rare Earths Begins 10,000m Drilling Campaign at Barkly Project

Barkly Rare Earths Fires the Starting Gun on Major 10,000 m Drilling Campaign

Barkly Rare Earths Limited (ASX: BAK) has commenced site preparation for a 10,000-metre Phase 1 drilling programme at its Barkly Project in the Northern Territory, with drilling anticipated to begin imminently according to its 6 July 2026 ASX announcement. The campaign, comprising approximately 400 shallow holes, is designed to test extensions around the company's existing 40 Mt at 2,100 ppm TREO Inferred Mineral Resource and set up a potential Mineral Resource estimate update by Q4 CY2026.

For investors, this is a clear operational milestone rather than a conceptual plan. The company reported that civil works are underway, the works crew has mobilised, access tracks and drill pads are being prepared, and a 30,000-litre diesel tank has already been delivered to support drilling operations.

Barkly Enters an Active Exploration Phase with an Existing JORC Resource Base

The current Barkly Mineral Resource gives the programme a defined starting point. According to the company, the resource stands at 40 Mt at 2,100 ppm Total Rare Earth Oxide (TREO) for 82,000 tonnes of contained TREO, reported under the JORC Code (2012) above a 430 ppm NdPr cut-off grade.

The existing resource also includes a reported 710 ppm Magnet Rare Earth Oxide (MREO) grade, which is relevant because magnet rare earths such as neodymium, praseodymium, terbium and dysprosium are the most commercially important subset of rare earth elements for permanent magnets.

In the announcement, Barkly stated that mineralisation within the initial resource sits inside two optimised pit shells and remains open laterally in all directions. That point matters because it suggests the current resource boundary reflects the present drill coverage rather than the full extent of the mineralised system.

Management also noted that four holes drilled between the two resource areas intersected rare earth mineralisation. Those holes sit across an intervening stretch of approximately 20 km, which the company says supports the case for broader lateral continuity across the Barkly Project.

What Did the Managing Director Say?

"This is an exciting step for Barkly. With site and pad preparation commencing this week, we are readying our initial 10,000 m Phase 1 drilling programme aimed at testing the next stage of growth from our existing 40 million tonne Inferred Mineral Resource," said Craig Wright, Managing Director.

Wright further noted that Barkly's "soft rock" deposit combines "substantial scale potential, mineralisation at surface, and low deleterious radioactive element content."

Phase 1 Drilling Is Designed Around Resource Growth and Better Geological Definition

According to the drilling plan outlined in the ASX update, the 10,000 m Phase 1 programme will consist mainly of Reverse Circulation (RC) drilling, with the majority of holes planned in the project's Immediate Zone. These holes are expected to average about 25 m depth, reflecting the shallow nature of the target.

The Immediate Zone coincides with Barkly's previously announced Exploration Target area. Furthermore, hole spacing is planned at roughly 800 m, which indicates a broad first-pass resource expansion approach rather than close-spaced infill drilling.

Programme Snapshot

• Total metres: 10,000 m
• Number of holes: ~400
• Average hole depth: ~25 m
• Primary method: RC drilling
• Main target area: Immediate Zone
• Secondary target area: Intermediate Zone
• Wider objective: test broader project-scale continuity

In the report, Barkly described three main areas of interest:

1. Immediate Zone — This is the primary Phase 1 target and the area where most holes are expected to be drilled. It surrounds the current resource and is the main focus for near-term expansion.

2. Intermediate Zone — This zone will test whether rare earth mineralisation extends beyond the immediate resource corridor into adjacent areas.

3. Broader project area — Wider reconnaissance drilling is expected to assess the scale of the larger mineralised system across the tenements.

The company also stated that the drilling programme is expected to gather bulk density data and sample quality information. These datasets can be important because they help support future work aimed at upgrading portions of a resource from Inferred to higher-confidence Indicated or Measured categories, if drilling density and geological continuity are sufficient.

Why the Barkly Geological Setting Matters

A key part of Barkly's geological model is the interpretation that the rare-earth-mineralised quartz sands were deposited on the seabed within a marine palaeo-embayment — in simpler terms, an ancient coastal bay or inlet where sediments accumulated over a broad area.

For non-specialist investors, the relevance is straightforward. Deposits formed in this kind of setting can show broad lateral continuity in both thickness and grade, although that continuity still needs to be confirmed by drilling.

At Barkly, the company's view is that the mineralised sediments may extend beyond the current resource footprint across the wider project area. Phase 1 drilling is intended to test that interpretation directly.

What Does "Soft Rock" Rare Earths Mean?

Rare earth projects are often described as either hard rock or soft rock, and the difference can influence mining and processing pathways.

Hard rock rare earth deposits are hosted in solid rock types such as carbonatites or granites. These deposits usually require crushing, grinding, and more intensive processing before the rare earth minerals can be separated.

Soft rock rare earth deposits, as described by Barkly, occur in softer, near-surface materials such as clay-rich or sandy sediments. Because the host material is less consolidated, mining may be simpler and the processing flow sheet may be less mechanically intensive, depending on metallurgical performance.

In addition, there are several practical implications worth noting:

• Near-surface mineralisation can reduce the amount of waste material that needs to be removed before ore is accessed
• Softer host material may lower handling and comminution requirements
• Low uranium and thorium content, as reported by Barkly, can reduce some of the complexity associated with radioactive elements
• Initial metallurgical testwork reported by the company showed 74.0% MREO extraction through conventional leaching and an initial concentrate grading 29,000 ppm TREO

These points do not confirm future project economics, but they are relevant indicators when investors assess whether a deposit may have a simpler development pathway than some hard rock rare earth projects.

Real-Time pXRF Screening Could Improve Programme Efficiency

One of the more practical features of the Barkly campaign is the use of two portable X-ray fluorescence (pXRF) instruments at site. According to the announcement, licensed operators will use the units at the drill rig to provide rapid indicative screening data from samples each day.

This is not the same as final laboratory assay data, which remains the formal basis for reporting results. However, pXRF can help the exploration team quickly identify patterns in elemental content and decide where to concentrate subsequent holes during an active programme.

In effect, the daily screening data may allow Barkly to adjust the programme as drilling progresses rather than waiting for the full laboratory turnaround. In a campaign with ~400 holes, that operational flexibility can be useful in directing metres toward areas that appear most prospective.

Management Alignment and the Scale Targets Now in Focus

The announcement also highlighted executive performance milestones linked to Mineral Resource growth. According to the company's IPO Prospectus, management has volunteered remuneration hurdles tied to reaching the following targets:

These are substantial targets relative to the current 40 Mt resource. They should be understood as management performance milestones rather than guidance. Even so, they provide a useful indication of the scale of expansion management believes may be possible if the broader geological model is confirmed by drilling.

For investors, the key point is alignment. Remuneration linked to resource growth creates a clear operational focus, particularly during an exploration phase where scale is central to value creation.

Buntine Adds a Second Exploration Stream in Q3 CY2026

While Barkly is clearly the company's lead asset, the ASX announcement also updated the market on the Buntine Base Metals Project. Fieldwork originally planned for Q4 CY2026 was completed ahead of schedule, and rock-chip samples have already been submitted for laboratory assay.

Results are expected in Q3 CY2026, adding another source of news flow alongside Barkly drilling updates. According to the company, Buntine hosts a 9 km mineralised corridor with three anomalous zones:

The company also referenced historical rock chip results from the prospectus, including grades up to 667 ppm Zn, 1.0% Pb, 1,760 ppm Co, 316 ppm Cu, 10.0% Mn, 7,100 ppm Ni, and 239 ppm Cr. These are historical surface sample results rather than current drilling outcomes, but they support the case for further assessment of the area's polymetallic potential.

Buntine also carries geological interest because the company states the Fraynes Formation is chronostratigraphically equivalent to the Barney Creek Formation, which hosts the McArthur River Pb-Zn deposit in the Northern Territory. That comparison describes geological age and setting, not deposit equivalence, but it helps explain why Barkly considers the region prospective for base metals exploration.

Milestones to Watch Through Q3 and Q4 CY2026

The report outlined a busy schedule through the second half of calendar 2026. For market participants, the value in this timeline is the expectation of regular operational updates rather than a single distant catalyst.

The company also stated it intends to provide a consistent investor update programme across Q3 and Q4 CY2026, suggesting a steady flow of announcements as results are received and interpreted.

Separately, Barkly advised it has appointed Leeuwin Wealth Pty Ltd as a capital markets adviser under an 18-month agreement, with consideration consisting of 6.0 million BAKO listed options exercisable at $0.30 and expiring 28 January 2029. According to the company, the mandate covers investor engagement and capital markets strategy.

Why This ASX Update Matters for BAK Investors

This ASX announcement marks the start of a materially active period for Barkly Rare Earths. The company is moving from resource definition into a large-scale expansion drilling campaign backed by existing JORC-compliant tonnage, shallow mineralisation, and initial metallurgical indicators.

The investor case, based on the announcement, rests on several current factors:

• An existing 40 Mt Inferred Mineral Resource rather than a greenfields starting point
• Mineralisation reported as open in all directions
• Evidence of mineralisation between current resource areas across a broad corridor
• A 10,000 m drilling campaign designed specifically to test expansion
• Initial testwork indicating 74.0% MREO extraction
• Low uranium and thorium content, according to the company
• 100% ownership of a 5,030 km² project area
• A defined pipeline of catalysts through Q4 CY2026

The most important near-term marker is likely to be whether drilling confirms continuity across the Immediate and Intermediate zones at grades that support resource growth. If that occurs, the planned Q4 CY2026 Mineral Resource estimate update could become the central valuation event for the second half of the year.

For now, however, the significance of the update is operational clarity. The crew is on site, the infrastructure is arriving, and the first phase of expansion drilling is close to beginning.

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