ASPIRE MINING LIMITED — Interim / Quarterly Report 2017

Jul 30, 2017

Aspire Mining Limited ABN: 46 122 417 243

69 Kewdale Road, Welshpool WA 6106

PO Box 1918 Subiaco WA 6904 Tel: (08) 9287 4555 Fax: (08) 9353 6974 Web: www.aspiremininglimited.com Email: info@aspiremininglimited.com

ASX RELEASE

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For Immediate Release – 31 July 2017

QUARTERLY REPORT Quarter Ended 30 June 2017

Balance Sheet Restructure and Placement Announcement and Approval

• Capital raising announced on 14 June seeking to raise up to $4 million from the issue of up to 200 million shares at 2 cents per share with a free attaching 12 month option exercisable at 2.5 cents. Prospectus issued 27 June 2017. Closing Date extended to 9 August 2017

• A total of A$2.6 million in debt and payables to be converted to equity, including the US$1 million option exercise cost for increasing the beneficial interest in the Nuurstei Coking Coal Project on the same terms as the proposed capital raising.

• Noble Group agreement to consolidate and roll out US$6.65 million in existing debt to August 2019.

• At the shareholders meeting held on 26 July 2017 all resolutions were passed to approve the balance sheet restructuring, capital raising and the exercise of the Nuurstei Option to acquire the additional interest in the Nuurstei Coking Coal Project.

Nuurstei Coking Coal Project (Now 90%).

• Nuurstei option exercised to acquire the remaining 50% of the ECJV increasing the Company’s beneficial interest in the Nuurstei Coking Coal Project to 90%.

• Conceptual Mining Study confirms the attractiveness of Nuurstei as a near term producer of coking coal at a competitive delivered cost.

• Registration of the Nuurstei Coking Coal Project with Mongolia’s Resource Authority. Important stage in the process of issuance of a Mining License for Nuurstei.

• LOI received from German Bank to fund Nuurstei Wash Plant.

Northern Railways Investment Update

• Northern Railways signed a non-binding MOU with China Gezhouba Group, a large Chinese State Owned Enterprise, to work together to advance the Erdenet to Ovoot Railway and in particular, to source construction finance.

• Russia’s Tyuva Republic and Northern Railways sign a Letter of Intent to work together and share data in relation to the Northern Rail Corridor which is in the best interests of both Northern Railways and the Tyva Republic.

• Russia has committed to the Kyzyl to Kuragino section of the Northern Rail Corridor.

• Northern Railways LLC and its advisers continue discussions with potential funders of the second stage feasibility study for the Erdenet to Ovoot Railway, part of the Northern Rail Corridor.

Aspire Mining Limited (ASX: AKM, Aspire , or the Company ), focussed on the exploration and development of metallurgical coal assets in Mongolia and the rail infrastructure required to bring production from these assets to market, is pleased to present its Quarterly Activities Report to Shareholders for the quarter ending 30 June 2017.

The Company currently wholly owns 100% of the large scale world class Ovoot Coking Coal Project ( Ovoot Project ) and has a 90% interest in the Nuurstei Coking Coal Project ( Nuurstei Project ) and 100% of the Erdenebulag Coal Project ( Erdenebulag Project ).

Northern Railways LLC ( Northern Railways ), Aspire’s Mongolian rail infrastructure subsidiary, is responsible for activities associated with the construction and commercialisation of the 549 km Erdenet to Ovoot Railway in northern Mongolia. The Erdenet to Ovoot Railway is a part of Mongolian Rail Policy included in the “Northern Rail” Economic Corridor, an initiative to establish an international economic corridor between China and Russia through Mongolia and supported by all three Governments to facilitate trade between the three nations and the wider Asian and European economies.

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Figure 1: Location of Aspire’s Projects and New Rail Economic Corridor

Nuurstei Coking Coal Project (90%)

During the quarter, the Company exercised an option to acquire the remaining 50% interest in the EC JV from major shareholder, Noble Group (SGX: N21, Noble ). The exercise of the option was approved at the shareholders’ meeting held on 26 July 2017.

The ECJV holds a 90% interest in the Nuurstei Project (90%).

During the quarter, the Company continued to investigate the economics of mining and trucking Nuurstei washed coking coal. The Company has completed a Conceptual Mining Study over a near surface mining area with the results announced on 19 April 2017. The study concluded that there is the potential for the Nuurstei Coking Coal Project to become a competitive cost near term producer of coking coal with first coking coal production occurring within 12 – 15 months of the decision to mine.

Development of the Nuurstei Project will be subject to the results of the 2017 drilling and sampling programme and the integration of these results into an updated geological model, new mine plan, feasibility study, access to funding and Board approval.

The Nuurstei Project was successfully registered with Mongolia’s Resource Authority and the Mining License is expected to be issued in the near term which will give the Company tenure over the licensed area for 30 years.

Capital cost estimates for developing the Nuurstei Project are put at approximately US$16 – US$20m with US$10 – US$12m of this relating to the construction for an on site wash plant. During the quarter, the Company received a Letter of Intent from German Bank ODDO BHF to fund the wash plant.

The Nuurstei Project is located in northern Mongolia and is 10 kilometres south from the Khuvsgul airmag capital of Moron. It also lies in close proximity to a sealed road to the Erdenet connection to the Trans Mongolian Railway. The Nuurstei Project is also well placed to be an early user of the proposed Northern Rail Corridor that includes extension of the rail from Erdenet to the Ovoot Project and then further northwest to the Russian city of Kyzyl. The use of rail from Nuurstei to Erdenet as opposed to the current trucking plan will save an estimated US$7 – US$9\tonne on transport costs to the Mongolian\Chinese border.

Coking coal markets in China and the seaborne markets have continued to strengthen over the quarter providing an attractive potential opportunity for development of the Nuurstei Project.

Ovoot Coking Coal Project (100%)

The Company continues to progress the Erdenet to Ovoot Railway to provide an efficient path for the Ovoot Coking Coal Project to reach steel mills in China, Russia and Eastern Europe.

The Company’s total project area including mining license and exploration land holdings, now totals 134 square kilometres.

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Northern Railways LLC

Mongolian registered Northern Railways LLC is the responsible entity progressing the development of the 549 kilometre Erdenet to Ovoot railway project in northern Mongolia (Rail Project) The Rail Project will be implemented under a private-public-partnership with the Government of Mongolia which has granted Northern Railways the exclusive right to build and operate the Rail Project under the terms agreed within the Concession Agreement executed in August 2015 and the time frame for completing conditions precedent in the Concession Agreement has subsequently been extended to August 2018.

Northern Railways LLC is currently owned 90% by Aspire and 10% by the Noble Group.

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Figure 2: Northern Railways Rail Project forms part of a planned international trade corridor between

Russia, Mongolia and China

In January 2017 the company received the First Stage Feasibility Study from China Railways Corporation subsidiary First Survey and Design Institute which confirmed that the Railway was both technically and financially feasible.

The Final Stage Feasibility Study will cost US$5.5 million and take around 6 months to complete from commissioning. Northern Railways is currently in discussion with potential funders of this feasibility study.

During the quarter, Northern Railways signed a non-binding MOU with the China Gezhouba Group Corporation (“CGGC”) to work together to advance the Erdenet – Ovoot Railway Project. CGGC is a large Chinese state owned construction company with branches in 99 countries and with broad experience in hydro power, bridges, railways and ports.

During the quarter there were also important developments on the Russian side of the Northern Rail Corridor with the Russian Government issuing a Concession for the Kyzyl to Kuragino Railway to connect the city of Kyzyl with the Trans-Siberian Railway to the north.

The focus will now turn to arranging the connection between Kyzyl and Ovoot. To assist the various parties to coordinate these arrangements, Northern Railways and Russia’s Tyuva Republic have signed a Letter of Intent to work together and share information in relation to the Northern Rail Corridor. This Letter of Intent noted that this corridor is in the best interests of Northern Railways and the future economic development of the Tyuva Republic.

CORPORATE

There were a number of significant transactions announced on 14 June 2017 which were subsequently approved by shareholders at the General Meeting held on 26 July 2017. The Company’s shareholders approved:

• the exercise of the ECJV Option by the Company to acquire from Noble the other 50% interest to provide 100% shareholding in the incorporated entity that holds 90% of the Nuurstei Project; and

• the making of a public offer of the Company’s securities pursuant to a prospectus issued under the Corporations Act to issue up to 200,000,000 fully paid ordinary Shares in the Company at an issue price of $0.02 per Share, together with one free attaching Option for every Share subscribed for, to raise up to $4,000,000 (exclusive of oversubscriptions); and

• the satisfaction of the cash consideration payable to Noble on the exercise of the ECJV Option of US$1,000,000 by the issue of Shares and Options at the same price and on the same terms and conditions as those being offered under the Prospectus; and

• the satisfaction of certain loan interest that will become due to Noble through the issue of Shares and Options at the same price and on the same terms as those being offered under the Prospectus; and

• the satisfaction of amounts owing to two other lenders through the issue of Shares and Options at the same price and on the same terms as those being offered under the Prospectus.

Capital Raising

The Company has announced a capital raising by way of a Prospectus based placement seeking to raise up to $4 million by the issue of up to 200 million shares at 2 cents per share with one free 12 month option to acquire another share exercisable at 2.5 cents for every one share subscribed for. The raising was approved by shareholders on 26 July 2017 and the closing date has been extended to 9 August 2017.

Cash Position

At 30 June 2017, Aspire had A$0.4 million cash at bank.

Capital Structure at 30 June 2017:

Security	No. on issue
Quoted OrdinaryShares	945,034,971
Unlisted Performance Rights	54,500,000

Interests in mining and exploration tenements at 30 June 2017:

Tenement	Location	Attributable Equity
Ovoot MV017098 017003X	Mongolia	100% 100%
Hurimt 14510X 14637X	Mongolia	100% 100%
Jilchigbulag 12816X	Mongolia	100%
Myngan 17922X	Mongolia	100%
Nuurstei (ECJV) 13958X 13580X	Mongolia	90% 90%
Erdenebulag (ECJV) 18294X	Mongolia	100%

Group Investment Structure

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Aspire Mining Limited
(ASX: AKM)
Exploration Projects Infrastructure Investments
Northern Railways Holdings Limited
(90%)
Ovoot Coking Coal Project (100%)
Jilchigbulag Coal Project (100%)
Myngan Coal Project (100%) Northern Railways LLC
(100%)
Nuurstei Coking Coal Project (90%)
Erdenebulag Coal Project (100%)
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Forward-looking statements: This announcement contains certain “forward-looking statements”. The words “anticipate”, “believe”, “expect”, “project”, “forecast”, “estimate”, “likely”, “intend”, “should”, “could”, “may”, “target”, “plan”, “consider”, “foresee”, “aim”, “will” and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on capital expenditure, operating expenditure and financial position and performance are also forward-looking statements. Such forwardlooking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of Aspire and Northern Railways.

About Aspire Mining Limited

Aspire Mining Limited is listed on the ASX (ASX: AKM) with mining and exploration licences in Mongolia’s Northern provinces and is focused on identifying, exploring and developing quality coking coal assets.

Ovoot Coking Coal Project (100%)

Aspire is also the owner of the world class Ovoot Coking Coal Project (Ovoot Project) which is the second largest coking coal project by reserves in Mongolia. The full realisation of the Ovoot Project is dependent on the construction of the Erdenet to Ovoot Railway which is being progressed by Northern Railways LLC (Northern Railways).

Nuurstei Coking Coal Project (90%)

On 26 July 2017, the Company’s shareholders approved the increase in the ownership interest from 50% to 100% in the corporate entity that has a 90% interest in Nuurstei Coking Coal Project (Nuurstei Project) located in northern Mongolia.

The close proximity of the Nuurstei Project to existing infrastructure (town, road, rail and services) provides an excellent opportunity to assess the economics of a road-based operation prior to the construction completion of the Erdenet to Ovoot Railway.

Depending on the further analysis of the results of an intended 2017 drilling program, future positive economic studies, funding and the grant of necessary approvals and licenses, the Nuurstei Project could commence a road based production operation and access the new Erdenet to Ovoot Railway two years from commencement of its construction.

About Northern Railways LLC

Northern Railways LLC (Northern Railways) is a Mongolian registered rail infrastructure company mandated to pursue the development of the Erdenet to Ovoot Railway, and is supported by a consortium consisting of Aspire Mining, and subsidiaries of Fortune 500 listed China Railway Construction Corporation – China Railway 20 Bureau Group Corporation (CR20G) and China Railway First Survey & Design Institute (FSDI).

The Erdenet to Ovoot Railway extends 549 km between the town of Erdenet to Aspire’s Ovoot Project, which connects northern Mongolia to China and international markets. In accordance with Mongolian National Rail Policy, the Erdenet to Ovoot Railway is a multi-user rail line and will be available for the transport of bulk materials, agricultural and general freight from the region to export markets including China, Russia and seaborne markets.

The Erdenet to Ovoot Railway will play an important part in the establishment of a new Northern Rail Economic Corridor through Mongolia, the subject of a trilateral programme agreed by the governments of China, Russia and Mongolia. This Economic Corridor through Mongolia links closely with Chinese policies to establish a New Silk Road to improve Euro-Asian trade, and Russia’s policy of establishing a Euro-Asian economic zone.

In August 2015, Northern Railways was granted an exclusive 30 year concession by the Mongolian Government to build and operate the Erdenet to Ovoot Railway. Northern Railways is now progressing negotiations for the required funding for the completion of a bankable feasibility study and other studies necessary to support applications for licences, permits and approvals, and negotiations for the EPC contract.

For more information contact:

Corporate, Media and Investor Relations David Paull Aspire Mining Ltd Managing Director

+61 8 9287 4555