AUSTRALIAN VANADIUM LIMITED — Capital/Financing Update 2017

Jan 19, 2017

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AVL to Sell Precious and Base
Metal Rights
Unlocking value for AVL and becoming a substantial shareholder
in a new copper/gold focused IPO
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Highlights:

20 January 2017 ASX ANNOUNCEMENT

• AVL has agreed to sell its:

• precious and base metals rights on the Gabanintha Project, and

• 100% equity in the Peak Hill Project located in the Bryah Basin.

• Sales Consideration is:

Australian Vanadium Limited

ASX: AVL FRA: JT7.F ABN: 90 116 221 740

T: +61 8 9228 3333 F: +61 8 6268 2699

E: info@australianvanadium.com.au

W: australianvanadium.com.au

• 5,000,000 shares in Bryah Resources Limited, and

• a 0.75% Net Smelter Return royalty upon commencement of production.

• Bryah Resources Limited is planning to list on ASX in the coming months. AVL to hold a 7 - 9% stake in Bryah Resources Limited upon listing.

• AVL shareholders to be given priority opportunity to participate in Bryah Resources Ltd IPO.

Street Address:

129 Edward Street Perth WA 6000

Postal Address:

129 Edward Street Perth WA 6000

Projects:

Gabanintha - Vanadium Blesberg,South Africa - Lithium/Tantalum

• Bryah’s land-holding in the Bryah Basin increases to over 700km[2] .

• AVL retains all mineral rights to vanadium, titanium, chromium, uranium, lithium, tantalum, iron ore and manganese at Gabanintha.

Australian Vanadium Limited (ASX:AVL, “the Company” or AVL”) is pleased to announce that it has agreed to sell the precious and base metal rights in the Gabanintha Project, as well as 100% equity in its Peak Hill Project tenement (E52/3349) to Bryah Resources Limited.

Under the deal AVL retains all mineral rights to vanadium, titanium, chromium, uranium, lithium, tantalum, iron ore and manganese within the Gabanintha Project area and retains primary title over the licenses. The development by AVL of the world class high grade Vanadium-TitaniumIron Project at Gabanintha will continue unabated.

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Bryah Resources Limited is an unlisted public company with a focus on gold and copper exploration and is planning to undertake an Initial Public Offering (IPO) on the ASX in the coming months. The transaction represents an opportunity for AVL to realise value for the gold and base metals’ potential of its Gabanintha and Peak Hill Projects, whilst it continues to pursue its strategic focus on energy storage minerals, primarily vanadium and lithium.

Apart from the Gabanintha and Peak Hill Projects acquired from AVL, Bryah has recently acquired tenements covering 500km[2] within the highly prospective and under-explored Bryah Basin, approximately 100km north of Meekatharra (see Figure 1). With the addition of the AVL ground, this land holding exceeds 700km[2] .

With AVL taking a significant equity position of between 7% and 9% in Bryah Resources Limited, the Company will benefit from any Cu/Au exploration success at Gabanintha or on their Bryah Basin tenements which are in an area of significant economic mineral deposits.

Management of Bryah Resources Limited have indicated that all AVL shareholders at the time of the capital raising will be given a priority opportunity to participate in the IPO.

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Figure 1 – Bryah Resources Limited’s Bryah Basin Project Location Map

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Historical Gabanintha Cu/Au Exploration Results

The Gabanintha Project is located 40km south of Meekatharra in Western Australia (see Figure 2). AVL announced in 2013 (YRR ASX announcement dated 27[th] November 2013) that it had received highly encouraging results from three reverse circulation (RC) drill holes drilled into the northern sector of the Gabanintha tenements. The drilling was carried out at the Tumblegum South Prospect (see Figure 2 and 3). The best results were:

• GRC1158 : 5 metres (31 - 36m) @ 8.72g/t Au and 3.05% Cu, including 1m (32 - 33m) @ 11.4g/t Au and 12.3% Cu. GRC1158 was drilled to test a southwest – northeast trending structure where a line of historical workings is present (see Figure 4).

• GRC1159 : 5 metres (58 - 63m) @ 9.64g/t Au and 0.18% Cu.

• GRC1157 : 10 metres (33 - 43m) @ 2.59g/t Au and 0.10% Cu, including 1m (39 - 40m) @ 6.99g/t Au. This hole was drilled to intersect a possible north-south trending structure.

Results from the full 12 hole programme are shown in the table below:

TABLE 1

Significant Results from 2013 RC Drilling

Gabanintha Project

(0.1% Cu and/or 0.5g/t Au Cut-off grade)

TABLE 1 Significant Results from 2013 RC Drilling Gabanintha Project (0.1% Cu and/or 0.5g/t Au Cut-off grade)	TABLE 1 Significant Results from 2013 RC Drilling Gabanintha Project (0.1% Cu and/or 0.5g/t Au Cut-off grade)	TABLE 1 Significant Results from 2013 RC Drilling Gabanintha Project (0.1% Cu and/or 0.5g/t Au Cut-off grade)	TABLE 1 Significant Results from 2013 RC Drilling Gabanintha Project (0.1% Cu and/or 0.5g/t Au Cut-off grade)	TABLE 1 Significant Results from 2013 RC Drilling Gabanintha Project (0.1% Cu and/or 0.5g/t Au Cut-off grade)	TABLE 1 Significant Results from 2013 RC Drilling Gabanintha Project (0.1% Cu and/or 0.5g/t Au Cut-off grade)	TABLE 1 Significant Results from 2013 RC Drilling Gabanintha Project (0.1% Cu and/or 0.5g/t Au Cut-off grade)	TABLE 1 Significant Results from 2013 RC Drilling Gabanintha Project (0.1% Cu and/or 0.5g/t Au Cut-off grade)	TABLE 1 Significant Results from 2013 RC Drilling Gabanintha Project (0.1% Cu and/or 0.5g/t Au Cut-off grade)	TABLE 1 Significant Results from 2013 RC Drilling Gabanintha Project (0.1% Cu and/or 0.5g/t Au Cut-off grade)	TABLE 1 Significant Results from 2013 RC Drilling Gabanintha Project (0.1% Cu and/or 0.5g/t Au Cut-off grade)	TABLE 1 Significant Results from 2013 RC Drilling Gabanintha Project (0.1% Cu and/or 0.5g/t Au Cut-off grade)
Hole ID	Easting (m)	Northing (m)	RL (m)	Azi.	Dip	Depth (m)	From (m)	To (m)	Interval (m)	Au g/t	Cu %
GRC1158	663612	7019732	468	2900	-600	198	31	36	5	8.72	3.05
			including				32	33	1	11.4	12.3
			and				162	164	2	4.64	0.21
GRC1159	663743	7019954	468	2680	-600	116	58	63	5	9.64	0.18
GRC1157	663611	7019942	468	3150	-600	198	33	43	10	2.59	0.10
			including				39	40	1	6.99	-
			and				49	51	2	0.64	0.19
			and				142	144	2	2.03	0.32
GRC1156	663599	7019937	468	0500	-600	204	No significant assays
GRC1155	668332	7013604	468	0500	-600	168	109	110	1	0.65	-
GRC1154	668005	7013919	468	2300	-600	348	344	346	2	-	0.14
GRC1153	668201	7013804	468	2300	-600	330	299	300	1	-	0.16
GRC1152	668167	7013757	469	0500	-600	330	7	24	18	-	0.42
			including				20	22	2	-	2.19
GRC1151	667888	7013785	475	0500	-600	354	277	286	9	-	0.15
GRC1150	663679	7019892	475	0500	-600	300	105	106	1	0.91	0.11
GRC1149	663663	7019879	498	0500	-600	300	61	62	1	0.36	0.29
GRC1148	663434	7019699	490	0500	-600	255	No significant assays

Note: that all depths and intersection widths are in metres down hole. True dip, width and azimuth of the mineralised structures are unknown because they are derived from logging RC chips. Therefore, any extrapolations of these measurements are interpretive.

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Figure 2 – Gabanintha Location Map
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Figure 3 – Tumblegum South Prospect Drilling Results 2013

The current geological interpretation of the Tumblegum South Prospect is that several mineralised structures, orientated approximately north-south, lie parallel to a large quartz vein as well as the main contact between basalt and ultramafic units. These structures form the target zones for follow-up exploration. Detailed mapping of outcrops, shears, quartz veins and workings were previously recommended to confirm the structural orientation of the mineralisation prior to follow-up drilling.

The exploration results from the initial program were very encouraging and are worthy of follow up work. A second program of RC drilling was designed by AVL to follow up on the earlier results, however the drilling was not undertaken due to the re-focus by the Company on its vanadium mineral resource.

Bryah Resources has indicated that the Tumblegum South Prospect will be a high priority drilling target following listing.

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Figure 4 – Drill Section through RC GRC1158

Key Commercial Terms of the Agreements

AVL will sell to Bryah Resources Limited (Bryah) the rights to precious and base metals over AVL licences at Gabanintha via a Mineral Rights Sale Agreement. Under the Agreement AVL will retain the mineral rights to vanadium, titanium, chromium, uranium, lithium, tantalum, iron ore and manganese within the Gabanintha Project area. AVL retains primary title over the licences. Under a separate Tenement Sales Agreement Bryah will acquire 100% ownership of E52/3349 located in the northern Bryah Basin, which is close to the Fortnum gold mine.

The total consideration for the sale of the two projects to Bryah is:

• (a) five million (5,000,000) ordinary fully paid shares in Bryah, and

• (b) a 0.75% Net Smelter Return royalty from the commencement of production.

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The Mineral Rights Sale Agreement at Gabanintha is subject to the following Conditions Precedent within 6 months:

• (a) Bryah completing capital raising(s) of at least $5.0 million, and

• (b) Bryah receiving conditional approval to be granted official quotation on ASX.

Managing Director Vincent Algar commented, “The transaction represents an opportunity for AVL to divest its gold and base metal exploration assets, and thereby receive value for the licences which we believe are not presently factored into AVL’s share price. The planned priority offer to AVL shareholders and the retention of a significant shareholding in the listed Bryah, will enable our shareholders to benefit in the potential upside these licences offer. Bryah has indicated that upon listing on ASX they will undertake a detailed exploration programme in both project areas including drilling to test some excellent results obtained at Gabanintha from AVL’s 2013 drilling programme.”

The Bryah team is headed by Mr Neil Marston, who was formerly Managing Director of ASX listed Horseshoe Metals Limited.

Neil Marston commented, “We are delighted to secure access to these gold and base metal rights at Gabanintha, as well as adding AVL’s exploration ground in the Bryah Basin to our extensive holding. The Gabanintha area has a history of gold and copper mineralisation and production, so we believe that there is excellent potential for early exploration success on AVL’s ground, particularly at the Tumblegum South Prospect. The Bryah Basin is a very prospective region to explore for copper and gold. The basin remains largely under-explored, as evidenced by some exciting exploration results recently reported by RNI Limited at its Wodger and Forrest Prospects, which are located immediately adjacent to part of our land holding.”

AVL Strategic Objectives

AVL’s vertical integration strategy, which is focused on vanadium and other battery metals, includes four pillars of activity to drive cashflow generation and shareholder value. These are:

• Progressing the Company’s flagship Gabanintha vanadium project in Western Australia, through the identification of cornerstone investors and the completion of additional studies.

• Growing AVL’s subsidiary, VSUN Energy Pty Ltd to deliver additional vanadium battery sales into the many niches being identified in the commercial energy storage sector across Australia.

• The planned production and sale of high-purity vanadium electrolyte – a core component of flow batteries, to be achieved through the development of an Australian vanadium electrolyte plant.

• Investigation of other potential battery metal projects around the world, with the latest acquisition being the Blesberg lithium-tantalum project (see ASX Announcement dated 4 November 2016).

The Company is broadening its strategic focus to encompass the wider energy storage minerals market by this initial acquisition of a quality lithium asset at Blesberg in South Africa. It is apparent that there is exceptional growth underway in energy storage markets, including storage raw materials. AVL intends to utilise its knowledge and structure to generate additional shareholder wealth by the development of a project pipeline. This strategy offers both diversification and opportunity to shareholders.

The Gabanintha Vanadium Project is currently one of the highest-grade projects being advanced globally with Measured, Indicated and Inferred Resources of 91.4Mt grading 0.82% V2O5. It also contains a discrete high-grade zone of 56.8Mt grading 1.0% V2O5 reported in compliance with the JORC Code 2012 (refer to YRR ASX Announcement dated 10 November 2015).

For further information, please contact:

Vincent Algar, Managing Director +61 8 9228 3333

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About Bryah Resources Limited

Bryah Resources Limited intends raising between $5 - $8 Million via a new ASX listing in the coming months.

Bryah Resources Limited’s exploration strategy is:

• to secure ground that has been under-explored but is in the right geological setting;

• to apply the best and latest exploration methods to evaluate the ground;

• to use high resolution geophysics to identify deeper structures and potentially mineralised zones;

• to drill test targets below the depth of previous drilling, and

• to keep overheads low in order to apply maximum funds on exploration activities.

Competent Person Statement – Exploration Results

The information in this statement that relates to Exploration Results is based on information compiled by independent consulting geologist Brian Davis BSc DipEd who is a Member of The Australian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists and is employed by Geologica Pty Ltd.

Brian Davis has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which is undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.

Mr. Davis consents to the inclusion in the report of the matters based on the information made available to him, in the form and context in which it appears.

Competent Person Statement – Mineral Resource Estimation

The information relating to the Gabanintha Project 2015 Mineral Resource estimate reported in this announcement is based on information compiled by Mr John Tyrrell. Mr Tyrrell is a Member of The Australian Institute of Mining and Metallurgy (AusIMM) and a full-time employee of AMC (AMC Consultants Pty Ltd). Mr Tyrrell has more than 25 years’ experience in the field of Mineral Resource Estimation. He has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and in resource model development to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.

Mr. Tyrrell consents to the inclusion in the report of the matters based on the information made available to him, in the form and context in which it appears.

The information is extracted from the report entitled “Substantial high-grade vanadium resource highlights Gabanintha’s world-class potential” released to ASX on 10 November 2015 and is available on the company website at australianvanadium.com.au .

The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resource or Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The company confirms that the form and context in which the competent person’s findings are presented has not been materially modified from the original market announcement.

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Appendix 1: JORC 2012 Table 1 Exploration Results – Historical Drilling at Gabanintha

SECTION 1 - SAMPLING TECHNIQUES AND DATA

Appendix 1: JORC 2012 Table 1 Exploration Results – Historical Drilling at Gabanintha	Appendix 1: JORC 2012 Table 1 Exploration Results – Historical Drilling at Gabanintha	Appendix 1: JORC 2012 Table 1 Exploration Results – Historical Drilling at Gabanintha
SECTION 1 - SAMPLING TECHNIQUES AND DATA
Criteria	JORC Code Explanation	Commentary
Sampling techniques	 Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc.). These examples should not be taken as limiting the broad meaning of sampling.  Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.  Aspects of the determination of mineralisation that are Material to the Public Report.  In cases where ‘industry standard’ work has been done this would be relatively simple (e.g. ‘reverse circulation drilling was used to obtain 1m samples from which 3 kg was pulverised to produce a 30g charge for fire assay’). In other cases, more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information.	 Reverse Circulation (RC) drilling was used to obtain 1.0m downhole interval chip samples.  RC drilling samples were collected using a standard cyclone and sampling hoppers.  One 2-5kg (average) sample taken for each one metre sample length and collected in pre-numbered calico sample bags.  Sample was dried, crushed and pulverised (total prep) to produce a sub sample for laboratory analysis using Aqua Regia Digestion and ICP analysis method (ARM133) at SGS laboratory, Perth. Samples were analysed for Au, Cu, Pb and Zn elements.  Quality of sampling continuously monitored by field geologist during drilling.  Sampling carried out under Company protocols and QAQC procedures as per industry best practice.  Field Duplicate samples at a ratio of 1:20 were collected for RC drilling.
Drilling techniques	 Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc.) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc.).	 Reverse Circulation (RC) drilling employing a 140mm diameter face sampling hammer.  RC drilling in 2013 was undertaken by Australian Vanadium Limited specifically targeting gold and copper mineralisation.
Drill sample recovery	 Method of recording and assessing core and chip sample recoveries and results assessed.  Measures taken to maximise sample recovery and ensure representative nature of the samples.  Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.	 RC sample recovery was recorded by the rig geologist and is based on how much of the sample is returned from the cone splitter. This is recorded as good, fair, poor or no sample.  To ensure maximum sample recovery and the representivity of the samples, an experienced Company geologist was present during drilling to monitor the sampling process. Any issues were immediately rectified.  No significant sample recovery issues were encountered in the 2013 RC drilling.  No twin RC or diamond drill holes have been completed to assess sample bias.  AVL is satisfied that the RC holes have taken a sufficiently representative sample of the mineralisation and minimal loss of fines has occurred in the RC drilling resulting in minimal sample bias.  No relationship between sample recovery and grade has been demonstrated.

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Criteria	JORC Code Explanation	Commentary
Logging	 Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.  Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc.) photography.  The total length and percentage of the relevant intersections logged.	 Logging of lithological intervals by collecting chips or clay sample every 1m corresponding with 1m sampled interval.  RC logging is both qualitative and quantitative in nature.  RC logging records the abundance/proportions of specific minerals and material types, lithologies, weathering, colour and physical hardness is estimated by chip recovery and properties (friability, angularity).  The entire length of RC holes was logged on lithological intervals, 100% of the drilling was logged. Where no sample was returned due to cavities/voids it is recorded as such.  Geophysical data collected from available RC holes only - magnetic susceptibility collected by RT1 hand magnetic susceptibility metre on the outsides of the green bags. Results were recorded and downloaded onto a computer at the end of the day.
Sub-sample techniques and sample preparation	 If core, whether cut or sawn and whether quarter, half or all core taken.  If non-core, whether riffled, tube sampled, rotary split, etc. and whether sampled wet or dry.  For all sample types, the nature, quality and appropriateness of the sample preparation technique.  Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.  Measures taken to ensure that the sampling is representative of the in-situ material collected, including for instance results for field duplicate/second-half sampling.  Whether sample sizes are appropriate to the grain size of the material being sampled_._	 Sampling technique:  RC Chip Samples:  ~4kg RC chip samples are collected via cone splitter for each 1m interval drilled in a calico bag. Samples are kept dry where possible.  The sample sizes were appropriate to correctly represent the mineralisation based on the style of mineralisation, the thickness and consistency of intersections, the sampling methodology and percent value assay ranges for the primary elements. • Quality Control Procedures  Duplicated sample: 5 every 200 samples (1:40).  Certified Reference Material samples were inserted by the laboratories in Perth containing a range of gold and base metal values. The assay standards were inserted: 5 in every 100 samples (1:20).  Blank washed sand material: 5 every 200 samples (1:40).  Overall QAQC insertion rate of 1:10.  Sample weights recorded for all samples. The recorded weight included the entire sample (large green bag ~20kg) and the ~4kg calico bag  Lab duplicates taken where large samples required splitting down by the lab.  Lab repeats taken and standards inserted at predetermined level specified by the lab. Sample preparation in the laboratory: Drying for minimum 12 hours at 1000C, then crushing to -2mm using a jaw crusher, and pulverising by LM5 or disc pulveriser to -75 microns for a 30g assay.

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Criteria	JORC Code Explanation	Commentary
Quality of assay data and laboratory tests	 The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.  For geophysical tools, spectrometers, handheld XRF instruments, etc., the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.  Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.	 Duplicates and samples containing standards were included in the analyses.
Verification of sampling and assaying	 The verification of significant intersections by either independent or alternative company personnel.  The use of twinned holes.  Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.  Discuss any adjustment to assay data.	 Significant intersections have been independently verified by alternative company personnel.  The Competent Person has visited the site and inspected the sampling process in the field and inspected the Laboratory.  All primary data are captured on paper logs and entered into excel templates.  All paper copies have been scanned and both digital and paper copies stored.  All data is sent to Perth and stored in the centralised ACCESS database which is managed by the company geologist.  Documentation related to data custody, validation and storage are maintained on the company’s server.  No adjustments or calibrations were made to any assay data, apart from resetting below detection values to half positive detection.
Location of data points	 Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.  Specification of the grid system used.  Quality and adequacy of topographic control.	 All Collars were initially located by the Senior Geologist then surveyed using DGPS then Company personnel relocated any collars by sight if a variation on planned drill hole location was required due to drainage or vegetation.  The grid system for Gabanintha prospect is MGA_GDA94 Zone 50.  Topographic data collected by hand held GPS  Downhole surveys were attempted on all RC by the drillers or their subcontractors. Sufficient number of readings were taken (at least 3 down hole) to understand if there was significant deviation in azimuth or dip.

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Criteria	JORC Code Explanation	Commentary
Data spacing and distribution	 Data spacing for reporting of Exploration Results.  Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.  Whether sample compositing has been applied.	 As this program was a reconnaissance program there was considerable variation in the drill spacing and hole orientation.  This drill spacing is also not sufficient to establish the degree of geological and grade continuity applied under the 2012 JORC code.  Sample compositing has not been applied to the RC samples; all RC samples are collected at 1m intervals.
Orientation of data in relation to geological structure	 Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.  If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.	 The attitude of the lithological units is dominantly westerly dipping from 40-80 degrees and most holes drilled to the east with drill holes inclined at -60 degrees and at right angles to the orientation of the lithological units. Some holes were drilled in other orientations to intersect specific mineralized structures, but always orthogonal to the strike of the structure. Due to locally varying intersection angles between drill holes and lithological units all results are defined as downhole widths.  No drilling orientation and sampling bias has been recognized at this time and is not considered to have introduced a sampling bias.
Sample security	 The measures taken to ensure sample security.	 Samples are packed into polyweave bags and then placed inside sealed Bulker bags. Samples are delivered to a 3rd party dispatch point in Meekatharra by Company staff.  Chain of custody was managed by the Company.  Samples were transported to the relevant Perth laboratory by courier.  Once received at the laboratory, samples were stored in a secure yard until analysis.  The lab receipts received samples against the sample dispatch documents and issues a reconciliation report for every sample batch.  Sample security was not considered a significant risk to the project.
Audits or reviews	 The results of any audits or reviews of sampling techniques and data.	 The Company database has been compiled from primary data by independent database consultants and was based on original assay data and historical database compilations.  A regular review of the data and sampling techniques is carried out internally.

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SECTION 2 - REPORTING OF EXPLORATION RESULTS

SECTION 2 - REPORTING OF EXPLORATION RESULTS	SECTION 2 - REPORTING OF EXPLORATION RESULTS	SECTION 2 - REPORTING OF EXPLORATION RESULTS
Criteria	JORC Code Explanation	Commentary
Mineral tenement and land tenure status	 Type, reference name/number, location and ownership include agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.  The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.	 The relevant tenements are 100% owned by the Company.  At the time of reporting, there are no known impediments to obtaining a licence to operate in the area and the tenement is in good standing.
Exploration done by other parties	 Acknowledgment and appraisal of exploration by other parties.	 The Gabanintha vanadium deposit was identified in the 1960’s by Mangore P/L and investigated with shallow drilling, surface sampling and mapping. In 1998, Drilling by Intermin Resources confirmed the down dip extent and strike continuation under cover between outcrops of the vanadiferous horizons.  Additional RC and initial diamond drilling was conducted by Greater Pacific NL and then the Company up until 2011.  Mineral Resource estimates have been conducted on the vanadium deposit  Exploration by the Company on the relevant tenements in respect to gold and base metals has included: i. Soil geochemistry sampling ii. Induced Polarisation surveys iii. RC Drilling in 2013
Geology	 Deposit type, geological setting and style of mineralisation.	 The gold and base metals mineralisation appears to be in shear hosted zones close to the contact between the basalt and ultramafic rock units
Drill hole information	 A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: o easting and northing of the drill hole collar o elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar o dip and azimuth of the hole o down hole length and interception depth o hole length.  If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.	 Refer to Table 1 of the announcement above.

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Criteria	JORC Code Explanation	Commentary
Data aggregation methods	 In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high grades) and cut-off grades are usually Material and should be stated.  Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.  The assumptions used for any reporting of metal equivalent values should be clearly stated.	 A nominal 0.1% Cu and/or 0.5g/t Au Cut-off grade was applied in reporting of significant intercepts.  Intercepts reported are length weighted averages.
Relationship between mineralisation widths and intercept lengths	 These relationships are particularly important in the reporting of Exploration Results.  If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.  If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (e.g. ‘down hole length, true width not known’).	 As this program was a reconnaissance program there was considerable variation in the drill spacing and hole orientation.  Due to locally varying intersection angles between drill holes and lithological units all results are defined as downhole widths.  This drill spacing is also not sufficient to establish the degree of geological and grade continuity applied under the 2012 JORC code.
Diagrams	 Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.	 See attached figures to this report.
Balanced reporting	 Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.	 All results are reported above a cutoff of 0.1% Cu and/or 0.5g/t Au.
Other substantive exploration data	 Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.	 Down hole geological information was recorded by the rig geologist at the time of drilling.
Further work	 The nature and scale of planned further work (e.g. tests for lateral extensions or depth extensions or large-scale step-out drilling).	 Additional drilling has been planned by the Company but not undertaken to date.

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