AVIRA RESOURCES LTD — Interim / Quarterly Report 2016

Oct 18, 2016

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QUARTERLY REPORT

September 2016

September Quarterly Report Exploration Activities Report Quarter ended 30[th] September 2016

During the September quarter, MGT Resources Limited (MGT, ASX:MGS) focused on capital restructuring and pursuing its uranium strategy.

HIGHLIGHTS

• MGT signed a binding term sheet with Paladin Energy Limited (Paladin) (ASX:PDN) over Manyingee Mining Leases (M08/86, M08/87, M08/88) in North Western Australia.

ASX CODE MGS

REGISTRY

Computershare

SHARES ON ISSUE

483,066,131

• On closing of the transaction MGT will acquire a 30% initial interest in Manyingee for US$10 million cash and will form a Joint Venture over the project with Paladin (Manyingee JV).

• MGT will then have the option to acquire an additional 45% of Manyingee JV from Paladin for US$20 million cash, exercisable for 12 months following Manyingee JV’s preparation of a plan to conduct a field leach trial for uranium extraction by in-situ recovery method.

• On 2 September 2016, MGT Energy Pty Ltd was registered as a wholly owned subsidiary of MGT Resources Limited.

• The $1,000,000 placement of 30,303,030 shares to Joseph Capital (Hong Kong) Limited under the Placement Agreement of 3 June 2016, has now been completed.

• On 14 September 2016, MGT entered into an agreement with Joseph Capital (Hong Kong) Limited to issue one unsecured convertible note with an aggregate face value of $500,000.

• On 15 September 2016, MGT announced that the maturity date of the $1,500,000 Convertible Note due to Armstrong Industries HK Limited had been extended.

• On 16 September 2016 the $6,000,000 in combined Convertible Notes owing to Cloud Adventurer Limited and Marvel Network Limited were converted to $6,000,000 Preference Shares and 72,727,274 unlisted share options, exercisable at $0.001, expiring 16 September 2021.

MGT has cash reserves of $332,000 as at 30[th] September 2016.

MGT

Resources Limited 1305/109 Pitt St Sydney NSW 2000 Australia

T: 61 2 9262 1122 F: 61 2 9299 5175

www.mgt.net.au info@mgt.net.au

ABN: 38 131 715 645

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1. MANYINGEE JOINT VENTURE, WESTERN AUSTRALIA Includes: M08/86, M08/87, M08/88

MGT Resources Limited is pleased to announce that it has signed a binding term sheet with Paladin Energy Limited over Manyingee Mining Leases (M08/86, M08/87, M08/88) in North Western Australia.

On closing of the transaction MGT will acquire a 30% initial interest in Manyingee for US$10 million cash and will form a Joint Venture over the project with Paladin (Manyingee JV).

MGT will then have the option to acquire an additional 45% of Manyingee JV from Paladin for US$20 million cash, exercisable for 12 months following Manyingee JV’s preparation of a plan to conduct a field leach trial for uranium extraction by in-situ recovery method.

Under the terms of the agreement, MGT will issue Paladin options to subscribe for new shares equivalent to 5% of MGT’s shares outstanding for a period of 12 months from closing of the transaction at A$0.06 per share; and options to subscribe for new shares equivalent to 5% of MGT’s shares outstanding for a period of 24 months from closing of the transaction at A$0.08 per share.

Paladin will issue MGT options to subscribe for new shares equivalent to 2% of Paladin’s shares outstanding for a period of 12 months from closing of the transaction at A$0.35 per share; and options to subscribe for new shares equivalent to 2% of Paladin’s shares outstanding for a period of 24 months from closing of the transaction at A$0.45 per share.

The transaction is conditional on definitive documentation, regulatory approval, financing and a vote by MGT’s shareholders. MGT’s directors have irrevocably agreed to vote in favour.

2. SUMMER HILLS TIN PROJECT, QUEENSLAND (MGT 89.48%)

Includes: Summer Hills ML20547; Mt Veteran Mill ML4349; Nanyetta EPM25433; Valetta ML20066

Field work has been conducted at the Summer Hill prospect. The main purpose of this mapping and sampling work has been to determine whether a similar model as that for the Dalcouth prospect could be applied to the Summer Hill prospect. This work is in a preliminary stage.

3. SOUTHERN QUEENSLAND PROJECTS (MGT 89.48%) Includes Yarrol EPM 8402; Mt Steadman EPM 12834; Gooroolba EPM 15426

No significant exploration work was undertaken on the Southern Queensland Project during the September quarter.

4. NYMBOOL PROJECT, QUEENSLAND (MGT 89.48%)

Includes Heads or Tails ML20655; Nymbool EPM16948; Nymbool West EPM25690; Fuzzy Hill EPM25716; Nymbool Extended EPM25347

No significant exploration work was undertaken on the Nymbool Project during the September quarter.

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5. PYRAMID GOLD PROJECT, QUEENSLAND (MGT 89.48%) Includes Pyramid EPM 12887; Pyramid 2 EPM25154; Pyramid 3 EPM 19554

No significant exploration work was undertaken on the Pyramid Project during the September quarter.

6. MGT CORPORATE

Cash

Cash at hand as at 30 September 2016 was $332,000.

The Mt Garnet tin project continues to be on care and maintenance.

During the last quarter, MGT’s focus has been on capital restructuring including entering into a term sheet with Cloud Adventurer Limited and Marvel Network Limited to convert their $6,000,000 outstanding convertible notes into preference shares and options.

General meeting

MGT Resources Limited held a general meeting on 16 September 2016. All resolutions put to shareholders were passed.

Funding

On 3 June 2016, MGT Resources Limited announced that Joseph Capital (Hong Kong) Limited had agreed to subscribe for 30,303,030 ordinary shares at $0.033 per share for $1,000,000 in new funding. The placement was completed on 19 July 2016.

On 14 September 2016, MGT entered into an agreement with Joseph Capital (Hong Kong) Limited to issue one unsecured convertible note with an aggregate face value of $500,000. The note will automatically convert into 15,151,515 MGT fully paid shares at $0.033 per MGT share on the date that MGT announces on the ASX the completion of the 30% acquisition of the Manyingee Mining Leases from Paladin. On 19 October 2016, the funds were received, the note issued and an Appendix 3B announced to the market.

Issue of shares and capital restructure

MGT Resources Limited issued the following during the quarter ended 30 September 2016:

• On 19 July 2016, Joseph Capital (Hong Kong) Limited was issued 30,303,030 ordinary shares in MGT Resources Limited upon receipt of $1,000,000 in funding from the placement agreement entered into on 3 June 2016.

• On 15 September 2016, MGT announced that the maturity date of the $1,500,000 Convertible Note due to Armstrong Industries HK Limited had been extended. to the earlier of 11 November 2017 and 14 days after the date that MGT is in receipt of funds from the successful capital raising required for MGT to purchase 30% of the Manyingee Mining Leases from Paladin and working capital in the amount of at least US$11.5 million.

• On 16 September 2016, following approval at the general meeting, Cloud Adventurer Limited was issued with 90,909,091 unlisted preference shares and 36,363,637 unlisted share options, with an exercise price of $0.001 and an expiry date of 16 September 2021.

• On 16 September 2016, following approval at the general meeting, Marvel Network Limited was issued with 90,909,091 unlisted preference shares and 36,363,637 unlisted share options, with an exercise price of $0.001 and an expiry date of 16 September 2021.

ENDS

ASX RELEASE

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Investor and media enquiries: Gary Kuo Managing Director, Executive Director T: +61 2 9262 1122 gary.kuo@mgt.net.au

Appendix 1

Mineral Tenements held at the end of the quarter and their location:

State	Tenement Name	Tenement ID	Location	Interest	Holder	Comments	Comments
QLD	Mt Veteran	ML 4349	Mt Garnet	89.48%	MGTM	Granted
QLD	Summer Hills	ML 20547	Mt Garnet	89.48%	MGTM	Granted
QLD	Heads or Tails	ML 20655	Mt Garnet	89.48%	MGTM	Granted
QLD	Valetta	ML 20066	Mt Garnet	100%	MGS	Granted
QLD	Nymbool	EPM 16948	Mt Garnet	89.48%	MGTM	Granted
QLD	Nanyetta	EPM 25433	Mt Garnet	89.48%	MGTM	Granted
QLD	Nymbool	EPM 25347	Mt Garnet	89.48%	MGTM	Granted
	Extended
QLD	Nymbool West	EPM 25690	Mt Garnet	89.48%	MGTM	Granted
QLD	FuzzyHill	EPM 25716	Mt Garnet	89.48%	MGTM	Granted
QLD	Pyramid	EPM 12887	Drummond	89.48%	MGTM	Granted
			Basin
QLD	Pyramid 3	EPM 19554	Drummond	89.48%	MGTM	Granted
			Basin
QLD	Pyramid 2	EPM 25154	Drummond	100%	MGS	Granted
			Basin
QLD	Yarrol	EPM 8402	Monto	89.48%	MGTM	Granted
QLD	Mt Steadman	EPM 12834	Gayndah	89.48%	MGTM	Granted
QLD	Gooroolba	EPM 15426	Gayndah	89.48%	MGTM	Granted
Abbreviations
EPMA	Exploration Permit for Minerals Application
EPM	Exploration Permit for Minerals
MLA	Mining	Lease Application
ML	Mining	Lease
MGS	MGT Resources Limited
MGTM	MGT MiningLimited, anunlistedAustralianpublic company
QLD	Queensland,Australia

ASX RELEASE

www.mgt.net.au info@mgt.net.au

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

+Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

Name of entity

MGT Resources Limited and its Controlled Entities

ABN

ABN Quarter ended (“current quarter”) 38 131 715 645 30 September 2016

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) staff costs (including Directors Fees) (e) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Research and development refunds 1.8 Other (provide details if material) 1.9 Net cash from / (used in) operating activities	- (98) - - (182) (256) - 1 (278) - - -	- (98) - - (182) (256) - 1 (278) - - -
	(812)	(812)
2. Cash flows from investing activities 2.1 Payments to acquire: (a) property, plant and equipment (b) tenements (see item 10) (c) investments (d) other non-current assets	- - - -	- - - -

• See chapter 19 for defined terms

1 September 2016

Page 1

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
2.2 Proceeds from the disposal of: (a) property, plant and equipment (b) tenements (see item 10) (c) investments (d) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material) 2.6 Net cash from / (used in) investing activities	- - - - - - -	- - - - - - -
	-	-
3. Cash flows from financing activities 3.1 Proceeds from issues of shares 3.2 Proceeds from issue of convertible notes 3.3 Proceeds from exercise of share options 3.4 Transaction costs related to issues of shares, convertible notes or options 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (provide details if material) 3.10 Net cash from / (used in) financing activities	1,000 - - (5) - - - - -	1,000 - - (5) - - - - -
	995	995
4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above) 4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	149 (812) - 995 -	149 (812) - 995 -
	332	332

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	332 - - -	149 - - -
	332	149
6. Payments to directors of the entity and their associates Current quarter $A'000 6.1 Aggregate amount of payments to these parties included in item 1.2 (112) 6.2 Aggregate amount of cash flow from loans to these parties included in item 2.3 - 6.3 Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2
		Current quarter $A'000
		(112)
		-
7. Payments to related entities of the entity and their associates Current quarter $A'000 7.1 Aggregate amount of payments to these parties included in item 1.2 (143) 7.2 Aggregate amount of cash flow from loans to these parties included in item 2.3 - 7.3 Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2
		Current quarter $A'000
		(143)
		-

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

8. Financing facilities available Add notes as necessary for an understanding of the position 8.1 Loan facilities 8.2 Credit standby arrangements 8.3 Other (please specify)	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
	-	-
	-	-
	See below	See below

• 8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.

On 14 September 2016, MGT Resources Ltd (‘MGT’) announced that it had entered into an unsecured $500,000 convertible note with Joseph Investment (Hong Kong) Limited. On 19 October 2016, MGT received the funds, issued the note and announced an Appendix 3B to the market.

9. Estimated cash outflows for next quarter	$A’000
9.1 Exploration and evaluation 9.2 Development 9.3 Production 9.4 Staff costs 9.5 Administration and corporate costs 9.6 Other (Interest payments) 9.7 Total estimated cash outflows	(63) - - (180) (240) (60)
	(543)*

• As noted under Section 8 above, on 14 September 2016, MGT Resources Ltd (‘MGT’) announced that it had entered into an unsecured $500,000 convertible note with Joseph Investment (Hong Kong) Limited. MGT received the funds on 19 October 2016, issued the note and announced an Appendix 3B to the market.

10. Changes in tenements (items 2.1(b) and 2.2(b) above)	Tenement reference and location	Nature of interest	Interest at beginning of quarter	Interest at end of quarter
10.1 Interests in mining tenements and petroleum tenements lapsed, relinquished or reduced	EPM15426 ‘Gooroolba’ near township of Gooroolba, Queensland	N/A	30 sub-blocks	25 sub-blocks
10.2 Interests in mining tenements and petroleum tenements acquired or increased	N/A	N/A	N/A	N/A

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

Sign here: ............................................................

Date: ...19.October 2016

(Company secretary)

Print name: Jacqueline Butler.........................................................

Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. See chapter 19 for defined terms 1 September 2016

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