ADVANCE ZINCTEK LIMITED — Capital/Financing Update 2017

Jan 16, 2017

17 January 2017

Advanced Nano Technologies Continued Improvement

Outsourced Manufacturing Agreement of ZinClear and End Formulations Signed

As previously stated at the recent Annual General Meeting in November 2016, Advanced Nano Technologies was unable to significantly grow sales due to the capacity limitations of its manufacturing facility in Perth and the significant costs of manufacturing operations and logistics in Perth.

ANO is pleased to announce that it has finalised and executed a Manufacturing Agreement with a USA based FDA approved and ISO certified contract manufacturer for the manufacture and supply of the ZinClear range of IM and XP dispersions and end formulations. This agreement will provide ANO the ability to reduce its sales price in excess of 25% and at the same time lift restrictions on manufacturing capacity. The transition process is expected to take three to six months after which some of the ZinClear range of IM and XP dispersions and end formulations will be manufactured in the USA. It is anticipated that we will use our US distributor Devereaux to warehouse and ship to part of our global distribution network.

ANO is endeavouring to establish further manufacturing agreements in Australia and eventually in Europe to accommodate the expected growth in sales from its XP product and future end formulations developed by its chemist network.

Profitability

The unaudited results for the half year December 2016 shows a NPBT of $62,000 compared to an operating loss of ($50,188) for the corresponding half in December 2015. This NPBT of $62,000 does not include the income tax benefit from the R&D return which is yet to be finalised.

Delays in Sales

As a result of the growth in sales experienced in the past 3 months, and the change to new precurser suppliers we envisage a delay in supply of approximately 3-6 weeks for our IM products only. We do not envisage a significant impact on sales and will advise the market if the delays continue.

ENDS Geoff Acton Company Secretary