AUKING MINING LIMITED — Capital/Financing Update 2016

May 3, 2016

Chinalco Yunnan Copper Resources Limited ABN 29 070 859 522

Suite 6, Level 11, 320 Adelaide Street Brisbane QLD 4000 GPO Box 216 Brisbane QLD 4001 Tel: +61 7 3041 1306

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4 May 2016

Ms Shannon Hong Senior Advisor, Listings Compliance Australian Securities Exchange, Sydney

Dear Shannon

RE: TERMINATION OF MILLENNIUM JOINT VENTURE

Please find attached a copy of a release made today to the ASX by Hammer Metals Ltd (ASX Code - HMX) relating to that company’s acquisition of all the issued shares in Element Minerals Australia Pty Ltd (“EMA”) from its parent company, Elementos Limited (ASX Code – ELT).

The only assets held by EMA comprised the five mining leases that formed the basis of CYU’s “Millennium Joint Venture” with ELT. As part of the sale of EMA to HMX, both CYU and ELT have agreed to terminate the Millennium Joint Venture with no party having any further right or claim against the other in relation to that JV. CYU will be issued 500,000 ordinary shares in HMX in exchange for surrendering its rights at Millennium.

It should be noted that under the terms of the Joint Venture agreement that CYU entered into in September 2013 with ELT, CYU still had approximately $400,000 of exploration expenditure to be committed to these mining lease areas (by September this year) in order to earn an initial 51% interest in the leases.

As previously reported to the ASX, CYU’s exploration team has carried out exploration drilling and modelling of the mineralisation within these ELT mining leases over the past 2 years. The current view is that while the mineralisation may extend along the strike zone and at depth, there remains significant uncertainty that a resource of the size of CYU’s stated exploration target (1 million tonnes of copper or copper equivalent) can be established. Furthermore follow-up drilling would be deep (+300m) and at significant additional cost. In these circumstances, the CYU’s Board believes that retirement from the Millennium Joint Venture is a prudent approach as the Company continues with its focus on other project opportunities.

Yours sincerely

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Paul Williams Managing Director 0419 762 487

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ASX Announcement (ASX: HMX)

May 4th 2016

High Grade Cobalt and Copper Mining Leases Acquired

Hammer Metals Limited (ASX:HMX) is pleased to announce it has agreed to acquire a 100% interest in 5 Mining Leases near Cloncurry in the Mount Isa region.

The acquisition secures a prospective high-grade cobalt-copper-gold target that complements Hammer’s existing tenement portfolio in the region.

ML’s 2512, 2761, 2762, 7506 and 7507 (the “Millennium” leases) are situated on the northern projection of the Pilgrim Fault, approximately 50km north of the Company’s Kalman deposit and 16km west of the Rocklands copper-cobalt mine. Previous drilling indicates the potential for significant copper-cobalt-gold mineralisation in the area of the historical workings including previous drill intersections of up to 19m at 1.27% Cu, 0.38% Co and 0.7g/t Au including 6m @3.45% Cu, 0.32% Co and 2.0g/t Au . (Refer to the CYU ASX release dated 4/12/2013 and the attached figures for details.)

Cobalt is a significant contributing metal in the Millennium mineralisation and is a critical metal in the production of Lithium Ion batteries which require approximately 15% Cobalt Oxide content depending on the maker. According to analysts a global supply shortage is possible with Tesla alone likely to increase the global demand by 10% PA.

At completion, Hammer will issue 0.5 million shares to Chinalco Yunnan Copper Resources Ltd (ASX:CYU) and pay $57,950 (including the replacement of an environmental bond) to Elementos Ltd (ASX:ELT) for the Millennium Mining Leases.

- ENDS -

For further information, please contact:

Alex Hewlett Executive Director info@hammermetals.com.au

Russell Davis Executive Chairman +61 (0)419195087

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Millennium Lease Area showing significant intercepts previously reported by Chinalco Yunnan Copper Resources Limited (ASX:CYU 4/12/2013)

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Mount Isa Project

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