ASPIRE MINING LIMITED — Interim / Quarterly Report 2017

Apr 27, 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 – 28 April 2017

QUARTERLY REPORT Quarter Ended 31 March 2017

Nuurstei Coking Coal Project.

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

• Road and Rail Infrastructure path to Chinese customers confirmed.

• Option exercise period to purchase Noble Group’s beneficial 45% interest in Nuurstei Project for US$1m and a royalty extended to end of June 2017.

• Mining License expected to be received in near future.

• A proposed 2017 US$1.5 million Drilling and Sampling Programme has been independently reviewed and determined to meet it objectives of converting Inferred to Indicated Resources as well as adding additional resources outside the current resource model.

• Subject to a new mine plan, feasibility study and Board approval, Nuurstei could be in production in 2018.

Northern Railways Investment Update

• Rail Concession timeline to complete conditions precedent extended by 18 months to August 2018.

• MOU with Mongolian\Russian Rail company, Ulaanbaatar Railways JSC, the operator of Mongolian rail network which covers capacity and tariffs to access this rail network as well as working together on design issues and standards, rolling stock selection and upgrading the Erdenet to Salkhit line.

• MOU signed with owners of large iron ore deposit within close proximity to Erdenet to Ovoot Railway with a requirement for 5 Mtpa of capacity.

• Northern Railways LLC and its advisers continue discussions with potential funders of the second stage Feasibility Study for the Erdenet to Ovoot Railway.

Corporate Update

• Balance sheet restructuring and sourcing of funding options for Nuurstei Project development and exercise of option well advanced.

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 31 March 2017.

The Company currently wholly owns 100% of the large scale, world class Ovoot Coking Coal Project ( Ovoot Project ), Through its 50% ownership in the Ekhgoviin Chuluu Joint Venture ( ECJV ), Aspire also holds an interest in the Nuurstei Coking Coal Project ( Nuurstei Project ) and the Erdenebulag Coal Project ( Erdenebulag Project ) in the south.

Northern Railways LLC, 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 Projects and New Northern Rail Corridor

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NORTHERN RAILWAYS LLC

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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 LLC the exclusive right to build and operate the Rail Project under the terms agreed within the Concession Agreement executed in August 2015 and subsequently varied to extend the time for completion of the conditions precedent.

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, China Railway First Survey and Design Institute Group Co Ltd, which confirmed that the Railway is 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 LLC is currently in discussion with potential funders of this feasibility study cost.

Rail Concession Extension

The Rail Concession for the Erdenet to Ovoot Railway was granted in August 2015. The Concession granted a 5 year construction period and a 30 year operating period before transfer of the Railway infrastructure into Government ownership. There was an initial 18 month period under which conditions precedent were to be completed prior to any construction commencement. In February 2017 the Mongolian Government extended the time for completion of the conditions precedent by a further 18

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months. The Company now has until August 2018 to complete the pre-development work and raise the funding for the Erdenet to Ovoot Railway.

The Company also received final approval for the rail alignment. This will now enable the Company to pursue land use agreements along the designated path.

During the Quarter Northern Railways LLC signed a MOU with the owners of the nearby Huren Chuulut Iron Ore deposit (refer Figure 2 for location). Huren Chuulut represents one of the largest iron ore deposits in Mongolia and the MOU concerns continuing cooperation and the provisional allocation of 5 million per annum of rail capacity. The MOU reflects the broad level of demand anticipated for the Erdenet – Ovoot Railway outside of the Ovoot Coking Coal Project.

OVOOT COKING COAL PROJECT (100%)

The Company continues to focus on progressing the Erdenet to Ovoot Railway to provide an efficient path for Ovoot Project coking coal to reach steel mills in China, Russia and Eastern Europe.

During the Quarter, the Company reduced the size of exploration land holdings in order to reduce holding costs. The total land holding is now 134 sq kms including mining license and exploration licenses covering the Ovoot Project.

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Figure 3: Ovoot Mining License and exploration ground.

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Ekhgoviin Chuluu Joint Venture (50%, Option to increase to 100%)

The ECJV is a 50/50 joint venture between Aspire and Noble Group which is mandated to explore and develop coal assets in Mongolia. Aspire acquired its interest in the ECJV in mid-2014 and has an option to acquire Noble 50% stake exercisable on or before 30 June 2017 for a consideration of US$1 million and a future royalty. In the event that the Company exercises its option, Aspire’s interest in the ECJV will move to 100%.

The ECJV currently holds interests in the Nuurstei Project (90%) and the Erdenebulag Project (100%).

Nuurstei Project (ECJV 90%)

The Nuurstei Project is located in northern Mongolia and is 10 kilometres south from the Khuvsgul airmag capital of Moron. It sits approximately 420 kilometres along a sealed road to the rail head at Erdenet and approximately 70 kilometres to the north of the proposed Erdenet to Ovoot Railway.

The Company released a Nuurstei Project Resource Statement that reported 4.75 Mt in Indicated Resources and 8.1 Mt of Inferred Resources in accordance with the JORC Code 2012 (refer to ASX announcement 13 April 2016). This was based on a report received from McElroy Bryan Geological Services Pty Ltd (“MBGS”), incorporating results of work completed in the 2014 and 2015 exploration drilling programs at the Nuurstei Project.

During the March Quarter, the Company and its geological and mining consultants have been working on a Conceptual Mining Study over a near surface mining area focused around the above Indicated Resources. On 19 April 2017 the results of this study were announced. The study concluded that there is the potential for the Nuurstei Project to become a competitive cost near term producer of coking coal.

Development of the Nuurstei Project will be subject to the results of a proposed 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 drilling and Sampling Programme has an estimated cost of US$1.5 million which will require funding to be sourced by the Company.

First coking coal production is anticipated within 12 months of a final development decision.

The Nuurstei Project is well placed to be an early user of the proposed Rail Project to extend the rail from Erdenet to the Ovoot Project and then further northwest to the Russian city of Kyzyl.

The rail operator UBTZ has confirmed that there will be sufficient rail and wagon capacity to carry Nuurstei Project coking coal to the Chinese border at Erlian. It was recently confirmed that China has approved Erlian as a coal border crossing. Noble Group has assisted in providing an analysis of cross border procedures, rail transport costs and costs at Erlian to access internal Chinese rail services.

A Mining Licence over the Nuurstei Project has been formally applied for and is expected to be issued in the near future. The Mining Licence would then give the ECJV tenure over the property for 30 years.

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Figure 5: Nuurstei project proximity to existing rail infrastructure and Moron, capital of the Khuvsgul province in Mongolia’s north

CORPORATE

Supporting Foreign Direct Investment into Mongolia

In March 2017 the Company, along with a number of other foreign invested resource companies in Mongolia, sponsored a Mongolian focused session at the Prospectors and Developers Association Conference (PDAC) in Toronto, Canada. Together with Mongolian Government representatives, the purpose was to promote Mongolia as a destination for capital investment. The session was very well attended.

Funding Requirements and Debt Facilities

The Company currently has two fully drawn debt facilities:

• US$5m debt facility payable to Noble Group on 16 February 2018; and

• US$2m debt facility due for repayment in August 2017.

The Company is currently in discussions with the Noble Group and the other lenders regarding a restructure of the loan facilities to balance with the capital needs of development of the Nuurstei Project.

The Company is also in discussions with a number of potential funders of the Nuurstei Project.

Capital Structure at 31 March 2017:

Security	No. on issue
Quoted OrdinaryShares	939,004,971
Quoted Options	185,479,167
Unlisted Performance Rights	44,000,000

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Interests in mining and exploration tenements at 31 March 2017:

Tenement	Location	Attributable Equity
Ovoot MV017098 017003X	Mongolia	100% 100%
Hurimt 14510X	Mongolia	100%
Jilchigbulag 12816X	Mongolia	100%
Myngan 17922X	Mongolia	100%
Nuurstei (ECJV) 13958X 13580X	Mongolia	45% 45%
Erdenebulag (ECJV) 18294X 18304X	Mongolia	50% 50%

Group Investment Structure

Aspire Mining Limited (ASX: AKM)	Aspire Mining Limited (ASX: AKM)	Aspire Mining Limited (ASX: AKM)	Aspire Mining Limited (ASX: AKM)	Aspire Mining Limited (ASX: AKM)
Exploratio	n Projects		Infrastructu	re Investments
Ovoot Coking Jilchigbulag Myngan Co	Coal Project (100%) Coal Project (100%) al Project (100%)		Northern Railwa (9	ys Holdings Limited 0%)
			Northern Railways LLC (100%)
ECJV (50%, option to earn 100%)  Nuurstei Coking Coal Project (90%)#  Erdenebulag Coal Project (100%)#

Ekhgoviin Chuulu Joint Venture assets

-Ends-

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.

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About Aspire Mining Limited

Aspire Mining Limited is listed on the ASX (ASX: AKM) and is the largest coal tenement holder in Mongolia’s Northern provinces and is focused on identifying, exploring and developing quality coking coal assets. Aspire currently owns a 50% interest in and is the operator of the Ekhgoviin Chuluu Joint Venture (ECJV), and has an option to increase its ownership to 100% of the ECJV. The ECJV owns a 90% interest in the Nuurstei Coking Coal Project (Nuurstei Project).

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 Ovoot Project development is dependent on the construction of the Erdenet to Ovoot Railway which is being progressed by Northern Railways LLC (Northern Railways).

Production from the Ovoot Project can coincide with the commissioning of the Erdenet to Ovoot Railway.

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.

About Ekhgoviin Chuluu Joint Venture

The Ekhgoviin Chuluu Joint Venture (ECJV) is currently a 50/50 joint venture arrangement between Aspire and Singapore listed Noble Group (SGX: N21, Noble). Aspire is the operator of the ECJV and has an option to purchase Noble’s 50% interest, exercisable by March 2017. The ECJV owns a 90% interest in the Nuurstei Coking Coal Project (Nuurstei Project) located in northern Mongolia and a 100% interest in the Erdenebulag Coal Project located in the South Gobi region of Mongolia.

Depending on the further analysis of the results of a future drilling program, 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.

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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.

Competent Persons Statement – Nuurstei Coking Coal Project

The information in this report that relates to Coal Resources at the Nuurstei Project, is based on information compiled under the supervision of, and reviewed by, the Competent Person, Mr Parbury, who is a full time employee of McElroy Bryan Geological Services (MBGS), is a Member of the Australasian Institute of Mining and Metallurgy (101430) and who has no conflict of interest with Aspire Mining Limited.

The reporting of Coal Resources for 13580X presented in this report has been carried out in accordance with the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’, The JORC Code 2012 Edition prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (JORC).

Mr Parbury has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 JORC Code. Mr Parbury consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Competent Person Statement – Nuurstei Project Conceptual Mining Study

The information in this report relating to the Nuurstei Project Concept Study Mine Plan is based on information compiled by Mr Jim Mahood who is a full time employee of Bluefield Advisory. Mr Mahood is a qualified Mining Engineer with over thirty years coal industry experience, is a member of the Australian Institute of Mining and Metallurgy (211103), and who has no conflict of interest with Aspire Mining Limited.

Mr Mahood has the relevant experience in relation to coal mineralisation being reported to qualify as a Competent Person as defined in the “Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code 2102 Edition)”.

The Concept Study Mine Plan coal quantities are derived from coal Resource and Project information provided by Aspire Mining Limited and MBGS, and as such Bluefield Advisory makes no guarantees in regard to the coal Resource. Where and if the Concept Study refers to coal quantities, these quantities are not JORC compliant Reserves.

Mr Mahood consents to the inclusion in this report of the matters based on the information, in the form in which it appears.

For more information contact:

Corporate, Media and Investor Relations

David Paull Aspire Mining Ltd +61 8 9287 4555 Managing Director

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