ADVANCE METALS LIMITED — Capital/Financing Update 2018

Jan 9, 2018

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ASX RELEASE

ASX Release

Wednesday, 10[th] January 2018

10[th] January 2018

ASX Code

PAK

Pre‐drilling Environmental Studies Completed

About Us

Pacific American Coal Limited is focused on the production, development and exploration of metallurgical coal assets in North America. The Company’s strategic focus is on the 100% owned Elko hard coking coal project in British Columbia and its investments in technological advanced opportunities. PAK has 100% ownership in a total of 6 Coal Leases in the East Kootenay Coal Field in British Columbia ‐ Canada and tenements in application in low volatile bituminous region of the Arkoma coal basin in Oklahoma.

Board

Non‐Executive Chairman – Geoff Hill Non‐Executive Director – Simon Bird Executive Director – Mark Sykes

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Pacific American Coal Limited ( ASX: PAK ) provides the following update regarding activity at the Company’s 100% owned Elko Coking Coal Project in B.C., Canada:

• Approval process for exploration program is finalising completion with most approvals received

• Pre‐drilling environmental studies have now been successfully completed

• Elko remains a very attractive project with projected low capital costs and infrastructure advantages

Company Secretary

Ian Morgan

Management

Business Development – Dom Hill Investor Relations – Simon Klimt

Project Stage Location Elko Exploration Canada Hazell Exploration Canada Howe Exploration Oklahoma Bokoshe Exploration Oklahoma

Pacific American Coal Limited ABN 83 127 131 604 GPO Box 1546 SYDNEY, NSW, 2001

www.pamcoal.com

Pacific American Coal Limited

P: +61 (0) 2 9238 1175 E: info@pamcoal.com W: www.pamcoal.com

ABN 83 127 131 604 Suite 1002, Level 10, 171 Clarence Street, Sydney NSW 2000 GPO Box 1546, Sydney NSW 2001

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With an exciting 2018 planned for the Company, the Board of Pacific American Coal is pleased to provide an update on key activities undertaken over recent months, all of which are helping progress the Elko Project towards the planned exploration program:

Permitting Process:

The Company continues to work closely with the Ministry of Energy, Mines and Petroleum Resources (MEM) and various other government departments, and has already received the majority of approvals required to commence the planned exploration program. The relationship with MEM remains highly collaborative, and the Company sees no significant hurdles in achieving the Notice of Work approval prior to 2018 exploration window.

Activity	Agency Responsible	Status	Approved	Notes
Notice of Work‐(Drilling Permits)	MEM	Submitted	No	Awaitingapproval
Archaeological Permit	MEM	Submitted	No	In Referral
Road Use Agreement	CANFOR	Approved	Yes	Agreement inplace
Access Management Areapermit	FLNRO	Approved	Yes	Approved
General Wildlife Permit	FLNRO	Approved	Yes	Approved
Special Use Permit ‐ Upgrade and use of road through Dominion Coal Block	Federal Government	Approved	Yes	Approved

Environmental Studies Completed:

Following the unprecedented wildfire season experienced in British Columbia during the summer, which included an extended state of emergency and industry shutdown across the Province (ASX announcement dated 29 September 2017), the Company and its consultants have now had sufficient access to the Elko Project site to complete the outstanding Grizzly Bear and Huckleberry studies. As a result, the Company is pleased to announce that it has now completed all studies it has been requested to complete as part of the approval process for its Notice of Works at the Elko Project.

Study	Status
Fish Assessment Stage 1 Study	Competed
Archaeological Stage 1 Study	Completed
Grizzly Bear Study	Completed
Huckleberry Study	Completed
White Bark Pine Desktop Study	Completed
GAP Analysis	In Progress

The final piece of work required to be undertaken by the Company and its consultants, is the GAP Analysis which is being prepared by Nupqu and other experts on behalf of the Company.

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PAK will continue to work with the government and other stake holders to ensure the Company is managing the project through best management practices. During spring the Company intends to complete stage 2 work of the fish and archaeological studies as well as field work associated with desktop reviews and the recommendations of the gap analysis.

Elko Project Remains Highly Attractive:

In addition to the environmental and permitting process, the Company is continuing to focus its activities on the commercial aspects which make the Elko Project a highly attractive opportunity for PAK including:

• Projected Low Capital Entry

• Competitive Infrastructure Advantage

Potential Low Capital Entry

As announced on 19 May 2017, Palaris Australia Pty Ltd (Palaris) delivered a favourable Project Study Report which among other items identified a production output that meant the project did not require significant capital expenditure to deliver the initial shipments of coal to the market. As such the Elko Project is planned to be a contract mining operation minimising the start‐up capital to major cost items such as site access, the coal handling and processing facilities and rail loadout. It is expected that the project will benchmark similar to other Canadian operations in terms of capital intensity, and is favourably positioned in the lowest quartile when benchmarked internationally.

Palaris conducted a benchmarking exercise to estimate the capital intensity of the Elko project against its global peers. The results indicate the Elko project is expected to be at the lower end of capital intensity and would compare favourably with other Canadian projects

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Infrastructure Advantage

The Elko Project site is approximately 20 km east from the township of Elko. The Canadian Pacific Railway line passes through the northern limit of the town. This railway line connects the USA border towns of Coutts, Alberta and Kingsgate, British Columbia with Vancouver, British Columbia as shown below. Access to the railway line from the site is via the Lodgepole Forest Service road, which is a well maintained road at the base of the valley, adjacent to the Elko Project site.

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Train Load out Area

A rail spur, train load out and stockpile facility will be built on the north side of Elko. The train load out infrastructure was designed and costed by Hatch in October 2016. The design of the train loadout consisted of the following:

• turn out from Canadian Pacific rail line with 2 km rail spur

• train load out system

• 33,600 t product stockpile pad on 0.7 Ha adjacent to the train load out

• covered 1,200 mm conveyor from stockpile to train load out bin with capacity of 2,000 tph

• conical train load out bin with 500t capacity

Rail

Coal is planned to be transported from the town of Elko to a port in Vancouver. The bulk rail provider that would be used for the transport of this coal is Canadian Pacific Railway, which also transports coal from the nearby Teck Resources mines, which is located further to the North. The proposed rail route is shown below.

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Port

Within the Vancouver region there are three ports that currently have coal export capacity. The ports are Neptune, Fraser Surrey Docks and Westshore with capacities of 12.5Mt, 4Mt and 33Mt respectively. Expansions are planned for both Neptune and Westshore ports. The ports are shown below.

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If port capacity is not available, there is an opportunity to export coal out of Prince Rupert, which is located approximately 2,000 km from Elko.

The majority of coal is planned to be exported to China, Japan, South Korea and India.

FOR FURTHER INFORMATION CONTACT

Australia Simon Klimt General Manager Investor Relations Pacific American Coal Ltd info@pamcoal.com

More details are available on PAK‘s website www.pamcoal.com

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COMPETENT PERSON’S STATEMENT

Previously Released Information

These ASX announcements refer to information extracted from reports available for viewing on the Company's website www.pamcoal.com

• 16.06.2014 TOCC Assets Independent Review

• 02.11.2015 Elko Coal Project Maiden JORC Resource 257.5 Million Tonnes

The Company confirms it is not aware of any new information or data that materially affects the information included in the original market announcements, and, in the case of exploration targets, that all material assumptions and technical parameters underpinning the exploration targets in the relevant market announcements continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings presented have not been materially modified from the original market announcements.

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