Alkane Resources — Investor Presentation 2016

Nov 9, 2016

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“ Securing Funding for a Rare Earth Project - the Polymetallic Advantage ”

12[th] International Rare Earth Conference Hong Kong 8-10 November 2016

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Key Drivers for Evaluation & Development

• GEOLOGY: The ore mineralogy and host rock composition. Distribution of ore minerals – dispersed, layered or patchy

• METALLURGY: Can the ore minerals be concentrated; degree of liberation from host. Ease of dissolution, recovery and form

• PILOTING: Absolutely essential to prove flowsheet chemistry and engineering; prove mass balances; and generate samples for market evaluation

• MARKETS: Price and demand. Face to face discussions with customers; exchange of specifications and sample products. Monitor trends for forward positioning and developing innovations

• OFFTAKE: Essential to establish revenue parameters for banking

• PARTNERSHIPS: Risk minimization and technology transfer

• LOCATION: Access to roads, rail, power, water, reagents and people

• FEASIBILITY & FINANCING: Detailed technical and financial analysis. Debt – project and special (Export Credit Agencies); Equity – strategic and market

• ENVIRONMENTAL: All approvals need to be in place and establish a social licence to operate

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REE deposit examples

The major deposits – alkaline intrusive complexes and rarely volcanic sequences. All have variable mineralogy and uranium and thorium content. Are found in many world wide locations.

Baogang – China Ganzhou RE + - China Mt Weld – Australia Mt Pass – USA Dubbo - Australia Araxa – Brazil Kola - Russia Strange Lake – Canada Thor Lake – Canada Ilimaussaq – Greenland Ngualla – Tanzania Nolans - Australia Browns Range – Australia Norra Karr – Sweden Roxby Downs – Australia

Iron ore – light REE – producing HREE - producing

Light REE (nearby Zr/Nb) - producing Light REE – care and maintenance

Polymetallic - Zr, Hf, Nb, REE – development Nb (LREE by product) – producing Polymetallic Ti, Nb, Ta, REE, (Zr) - producing Polymetallic - HREE (Zr, Nb) - stalled Polymetallic – HREE (Zr, Nb) - stalled LREE (U) - feasibility LREE - feasibility LREE (P) - feasibility HREE - feasibility Polymetallic – REE (Zr, Nb) - feasibility

Polymetallic Cu, Au, U (LREE) - producing but not REE

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At Current REE Prices

Both China internal and China FOB prices have remained flat or continued to drift slightly lower since mid 2015

Baogang – China Ganzhou RE + - China

Iron ore – not economic at present. LREE producing HREE producing

Most Chinese REE producers report break even or current losses Mt Weld – Australia Light REE – producing Mt Weld reporting breakeven cash flow financials Mt Pass – USA Light REE – care and maintenance Mt Pass substantial losses and closed

Dubbo - Australia Polymetallic - Zr, Hf, Nb, REE – development Robust financials at current metal prices

Pure rare earth projects suffer from current pricing, challenging their economics, placing pressure on funding and perception. A polymetallic project can overcome this problem.

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The Example - Dubbo Zirconia Project

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LOCATION: 400km northwest of Sydney within a region that has substantial infrastructure – roads, rail, power, gas, light engineering, people (~100,000), being a large agricultural and mining area

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GEOLOGY: 2000- 2001 A very large polymetallic resource of the metals zirconium, hafnium, niobium (tantalum), yttrium and rare earths defined. Resource supports 80 year open pit operation. Grade uniformly distributed throughout the host rock

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• METALLURGY: Flow sheet developed 2000 – 2007 based upon non-standard mineralogy. Various mini-plant test runs

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• DEMONSTRATION PILOT PLANT: Built and operated at ANSTO since 2008. Multiple runs for optimisation and process risk mitigation, and product sample for evaluation

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• MARKETING: Substantial effort since 2008 using specialist consultants. Sample products provided to customers with regular feedback, and modifications through the DPP

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The Example - Dubbo Zirconia Project

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OFFTAKE: Agreements with Treibacher Industrie AG for all niobium output; Siemens for several rare earths, zirconium, hafnium and niobium. Marketing and Sales Agreement with Minchem Ltd for all zirconium output. Multiple other agreements at various stages of progress

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• PARTNERSHIPS: Treibacher Industrie AG to produce ferroniobium; Vietnam Rare Earth JSC to toll process DZP REE concentrate to produce separated rare earth and metals/metal alloys

Finnish technology/engineering solutions company Outotec appointed for Early Contractor Involvement (ECI) in September 2015 to present a fixed price EPC

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FEASIBILITY & FINANCIAL: August 2015 Front End Engineering Design (FEED) study confirmed the robust technical and financial DFS of April 2013

Sumitomo Mitsui Bank financial advisors. On going discussions with ECAs

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ENVIRONMENTAL: ALL State and Federal environment approvals completed by May 2016

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Process Flowsheet

The process is a whole of ore sulphuric acid leach, followed by solvent extraction separation and chemical refining to produce products. It is a combination of several well known individual process components, developed over 15 years.

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Product Output

Rare earth chemical concentrate Zirconia and zirconium chemicals Hafnium as HfO2 concentrate Niobium as ferro-niobium	95% REO 99% ZrO2 HfO2conc 65% Nb	6,667 tpa (REO units) 16,374 tpa (ZrO2units) 50 tpa* (Hf units) 1,967 tpa (Nb units)

• [Start up output. 200tpa potential depending upon market demand]

Tonnage based upon recoveries developed from mass balances of the demonstration pilot plant. Total output approximately 25,200 tpa of all products

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Rare Earth Output

					DZP		REE SX						Toll treatment – off site	Toll treatment – off site
					La / Ce Pr / Nd Sm / Eu / Gd Tb / Dy / Ho / Er / Tm / Yb / Lu Y(2/3N)					La2O3 CeO2	1,441tpa 2,367tpa		Ho2O3 Er2O3 Pr6O11 Nd2O3 Tb4O7 Dy2O3 Sm2O3 Eu2O3 Gd2O3	237tpa 921tpa 112tpa 3tpa 107tpa 22tpa 75tpa 14tpa 122tpa
													Tm2O3	6tpa
										Y2O3	1,031tpa		Yb2O3 Lu2O3	61tpa 6tpa

Tonnage based upon recoveries developed from mass balances of the demonstration pilot plant, including solvent extraction stages, some of which will occur on site at the DZP. Total saleable RE products from site ~1,030 tpa and off site ~ 1,675 tpa.

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DZP Financial Summary

Front End Engineering Design (FEED) completed August 2015 on 1Mtpa ore processed

Capex US$0.93B / US$80M contingency Revenue US$430 - $470Mpa Opex US$220 - 230Mpa EBITDA US$235 - $275Mpa 20 year NPV US$1.1B (8%)

Revenue based upon Chinese domestic rare earth prices and current spot ranges for Zr and Nb, and a long term sustainable Hf price.

Rare earth revenues largely derived from Pr, Nd, Tb, Dy and Y (for production of RE magnets and special ceramics/alloys)

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DZP REVENUE SPLIT
Pr-Nd,
Nb, 14.4%
19.8%
Hf, 8.3%
Tb-Dy-Y,
13.5%
Zr, 37.3%
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Operating costs to produce a kilogram of product range from US$7.00 to US$8.00/kg

Revenue averages US$17.00/kg (REO US$23/kg or US$56/kg without La/Ce; Zr US$8-25/kg; Hf US$500/kg; Nb US$38/kg) Capital intensity ~ US$35/kg of product

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Modularised Development Concept

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Consequent on a review of engineering and capital cost following the FEED study, a modularised development and construction concept is being investigated

Progressive build concept

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Key outcomes to date have shown that the 1Mtpa plant can be divided into four 0.25Mtpa trains that can be built in easily transportable modules

This is a similar strategy to that used in the LNG industry

Initial optimisation indicates two 0.25Mtpa trains for 0.5Mtpa ore throughput operation

De-risks financial exposure, technical complexity and assists market qualification

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Capex for first stage estimated ~US$480M plus ~US$80M working capital. Includes full site infrastructure; power and water supply and half size sulphuric acid plant.

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Production to commence in 2019. Revenue and opex about 50% of base case

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Second stage construction commences in 2022 with production scheduled in 2023. Capex estimated ~ US$360M, and takes product output and revenue to full production level of 1Mtpa

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Modularised Development Concept

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Construction 2017 - 2019

Estimated cost US$480M ---------------------

Construction 2022 - 2023 Estimated cost US$360M ---------------------

Estimated cost US$840M

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• ZIRCONIUM: Auto catalysts for emissions minimization; thermal barrier coatings for turbines (jet and industrial); ceramics; special alloys/glass; paint drying; paper coating; jewelry

• HAFNIUM: Turbine super alloys (jet and industrial); special ceramics; k-gates (computer chips). New applications such as heat energy conversion to electricity

• NIOBIUM: Special alloys (steel for tensile strength and lightness); other super alloys; superconductors; coinage

• RARE EARTHS: Permanent magnets for electric motors (wind turbines, marine, hybrid and electric cars); catalysts for emissions minimization; batteries; phosphors for energy efficient lighting; numerous electronic applications; photovoltaics; gasless refrigeration

Key Applications

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The Polymetallic Advantage ?

Advantages Market diversity Revenue diversity Revenue stability Spreading of risk Future proofing (technology changes)

Disadvantages Process complexity Higher capex Market complexity Investor understanding Benchmarking

Advantages >> disadvantages with appropriate process and market input. It takes time to de-risk for financiers

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Disclaimer

This presentation contains certain forward looking statements and forecasts, including possible or assumed reserves and resources, production levels and rates, costs, prices, future performance or potential growth of Alkane Resources Ltd, industry growth or other trend projections. Such statements are not a guarantee of future performance and involve unknown risks and uncertainties, as well as other factors which are beyond the control of Alkane Resources Ltd. Actual results and developments may differ materially from those expressed of implied by these forward looking statements depending on a variety of factors. Nothing in this presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell securities.

This document has been prepared in accordance with the requirements of Australian securities laws, which may differ from the requirements of United States and other country securities laws. Unless otherwise indicated, all ore reserve and mineral resource estimates included or incorporated by reference in this document have been, and will be, prepared in accordance with the JORC classification system of the Australasian Institute of Mining, and Metallurgy and Australian Institute of Geosciences.

Competent Person

Unless otherwise stated, the information in this presentation that relates to mineral exploration, mineral resources and ore reserves is based on information compiled by Mr D I Chalmers, FAusIMM, FAIG, (director of the Company) who has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Ian Chalmers consents to the inclusion in the presentation of the matters based on his information in the form and context in which it appears.

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Thank you

©

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DZP Resources and Reserves

Dubbo Zirconia Project – Mineral Resources

Toongi	Tonnage	ZrO2	HfO2	**Nb2O5 **	**Ta2O5 **	Y2O3	REO
Deposit	(Mt)	(%)	(%)	(%)	(%)	(%)	(%)
Measured	35.70	1.96	0.04	0.46	0.03	0.14	0.75
Inferred	37.50	1.96	0.04	0.46	0.03	0.14	0.75
Total	73.20	1.96	0.04	0.46	0.03	0.14	0.75

These Mineral Resources are based upon information compiled by Mr Terry Ransted MAusIMM (Alkane Chief Geologist) who is a competent person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Terry Ransted consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The full details of methodology were given in the 2004 Annual Report.

Dubbo Zirconia Project – Ore Reserves

Toongi	Tonnage	ZrO2	HfO2	Nb2O5	Ta2O5	Y2O3	REO
Deposit	(Mt)	(%)	(%)	(%)	(%)	(%)	(%)
Proved	8.07	1.91	0.04	0.46	0.03	0.14	0.75
Probable	27.86	1.93	0.04	0.46	0.03	0.14	0.74
Total	35.93	1.93	0.04	0.46	0.03	0.14	0.74

These Ore Reserves are based upon information compiled by Mr Terry Ransted MAusIMM (Alkane Chief Geologist) who is a competent person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. The reserves were calculated at a1.5% combined ZrO2+Nb2O5+Y2O3+REO cut off using costs and revenues defined in the notes in ASX Announcement of 16 November 2011. Terry Ransted consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Note: ASX announcements 16 November 2011, 11 April 2013, 30 October 2013 and 27 August 2015 - the Company confirms that all material assumptions and technical parameters underpinning the estimated Mineral Resources and Ore Reserves, and production targets and the forecast financial information as disclosed continue to apply and have not materially changed.

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