AVIRA RESOURCES LTD — Interim / Quarterly Report 2016

Jul 28, 2016

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QUARTERLY REPORT

June 2016

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

During the June quarter, MGT Resources Limited (MGT, ASX:MGS) focused on capital restructuring.

HIGHLIGHTS

• During the quarter MGT announced that Joseph Capital (Hong Kong) Limited agreed to subscribe for 30,303,030 shares at an issue price of $0.033 per share via a placement, raising $1,000,000. The placement was completed on 19 July 2016.

ASX CODE

MGS

REGISTRY

Computershare

SHARES ON ISSUE

483,066,131

• In consideration for Joseph agreeing to subscribe for the placement shares, MGT has agreed to grant Joseph, 60,606,060 unquoted share options exercisable at $0.033 each into one ordinary share per option on or before 31 December 2016.

• During the 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. A general meeting, now anticipated to take place in mid to late September 2016, will be held to approve the conversion and a notice of meeting sent out in due course.

• A general meeting was held on 30 June 2016 to approve the conversion of the $2,000,000 converting note to Auskong International Mining Investment Co., Limited into 60,606,061 shares at $0.033 per share.

MGT

Cash at hand as at 30 June 2016 was $149,000. On 19 July 2016, MGT received $1,000,000 from Joseph Capital (Hong Kong) Limited as part of the placement agreement announced to the market on 3 June 2016.

Resources Limited Suite 1305, Level 13, 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

1

1. 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, but rhyolite, which occurs in close association with mineralisation at the Dalcouth prospect, has now also been identified at Summer Hill.

2. 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 June quarter.

3. 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 June quarter.

4. 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 June quarter.

5. MGT CORPORATE

Cash

Cash at hand as at 30 June 2016 was $149,000.

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. A general meeting, now anticipated to take place in mid to late September 2016, will be held to approve the conversion and a notice of meeting sent out in due course.

ASX RELEASE

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

2

MGT also commenced its pursuit of its new strategy of investment in uranium mining assets via the purchase of $2,000,000 Cauldron Energy Limited ordinary shares as announced to the market on 24[th] March 2016.

Since quarter end, MGT has further pursued its strategy of investment in uranium mining assets via entering into a binding term sheet with Paladin Energy Limited over Manyingee Mining Leases. See ASX announcement on 21 July 2016.

Auskong International Mining Investment Co., Limited provided $2,000,000 by way of a Converting Note for the purchase of the Cauldron Energy Limited shares. A general meeting was held on 30[th] June 2016 and shareholders approved the conversion of the $2,000,000 Converting Note into 60,606,061 ordinary shares at $0.033 per share.

On 3[rd] June 2016 MGT Resources Limited announced a $1,000,000 placement to Joseph Capital (Hong Kong Limited) at $0.033 per shares with $2,000,000 free attaching options, exercisable at $0.033 on or before 31[st] December 2016. The placement completed on 19 July 2016.

ENDS

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
QLD	MtVeteran	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

ASX RELEASE

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

3

Abbreviations
EPMA	Exploration Permit for Minerals Application
EPM	Exploration Permit for Minerals
MLA	MiningLeaseApplication
ML	MiningLease
MGS	MGT Resources Limited
MGTM	MGT MiningLimited,an unlisted Australianpublic company
QLD	Queensland,Australia

ASX RELEASE

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

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining 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

Name of entity

MGT Resources Limited and Its Controlled Entities

	ABN 38 131 715 645 Consolidated statement of cash flows	ABN 38 131 715 645 Consolidated statement of cash flows	Quarter ended (“current quarter”) 30 June 2016	Quarter ended (“current quarter”) 30 June 2016
			30 June 2016
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.73 Other Net Operating Cash Flows		Current quarter 30/6/2016 $A’000		Year to date (12 months) $A’000
		(71) - - (356) - 1 (61) - -		(670) - - (1,316) - 11 (604) - -
		(487)		(2,579)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) exploration & evaluation (c) other fixed assets (d) Shares in Cauldron Energy Ltd (See note 6) 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)		- - - - - - - - - -		- - - (2,000) - - 37 - - -
		-		(1,963)
		(487)		(4,542)

• See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 1

Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(487)	(4,542)
Cash flows related to financing activities 1.14 Proceeds from exercise of options 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from issue of converting notes (Note 6) 1.17 Proceeds from secured loan (Note 8) 1.18 Dividends paid Net financing cash flows	- - - - -	1,200 - 2,000 - -
	-	3,200
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end ofquarter	(487) 636	(1,342) 1,491
	149*	149

* On 19 July 2016 MGT Resources Limited received $1,000,000 from Joseph Capital (Hong Kong) Limited under the placement agreement announced to the market on 3 June 2016.

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	Current quarter 30/6/2016 $A’000
		74
		N/A
1.25	Explanation necessaryfor an understandingof the transactions

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

2.2	Details of outlays made by other entities to establish or increase their share in projects in
	which the reportingentityhas an interest

• See chapter 19 for defined terms.

Appendix 5B Page 2

Appendix 5B Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount used $A’000
	N/A	N/A
	N/A	N/A

Estimated cash outflows for next quarter

Estimated cash outflows for next quarter
4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration (Including $240,000 interest payment on Convertible Note)	$A’000
	142
	-
	-
	446
Total	588*

* On 19 July 2016 MGT Resources Limited received $1,000,000 from Joseph Capital (Hong Kong) Limited under the placement agreement announced to the market on 3 June 2016.

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as	Current quarter	Previous quarter
shown in the consolidated statement of cash flows)	30/6/2016	31/3/2016
to the related items in the accounts is as follows.	$A’000	$A’000
5.1 Cash on hand and at bank	149	636
5.2 Deposits at call	-	-
5.3 Bank overdraft	-	-
5.4 Other (provide details)	-	-
Total: cash at end of quarter(item 1.22)	149	636

• See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 3

Appendix 5B Mining exploration entity quarterly report

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter
	N/A	N/A	N/A	N/A
	N/A	N/A	N/A	N/A

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note3) (cents)	Amount paid up per security (see note3) (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues b) Decreases through returns of capital, buy- backs	452,763,101	452,763,101 Note 7	Various	Various
	50,000,000 – see Note 6 60,606,061 – see Note 6 N/A	50,000,000 – See Note 6 60,606,061 – see Note 6 N/A	N/A per Note 3 below – all fully paid $0.033 –see Note 6 N/A	N/A per Note 3 below – all fully paid $0.033 – see Note 6 N/A

• See chapter 19 for defined terms.

Appendix 5B Page 4

Appendix 5B Mining exploration entity quarterly report

7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	$1,500,000 $3,000,000 $3,000,000 See Note 6 below for more information.	Nil Nil Nil	$0.0875 $0.11 $0.11	$1 $1 $1
	(a) N/A (b) (i)($1,500,000) Converted by Aukong International Mining Investment Co. Limited on 9 June 2016. (b) (ii)($2,000,000) Converted by Auskong International Mining Investment Co., Limited on 30 June 2016 See Note 6 for further information.	(a) N/A (b) (i)Nil (b)(ii) Nil	(a) N/A (b)(i)$0.03 (b)(ii)$0.033	(a) N/A (b)(i)$1 (b)(ii)$1
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	6,800,000 1,050,000	Nil	Exercise price $0.15 $0.15	Expiry date 7 November 2016 17 December 2016
	N/A	N/A	N/A	N/A
	N/A	N/A	N/A	N/A
	N/A	N/A	N/A	N/A
7.11 Debentures (totals only)	N/A	N/A	N/A	N/A
7.12 Secured Loan (totals only)	$1,500,000 Note 8	N/A	N/A	31stMarch 2017

• See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 5

Appendix 5B Mining exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).

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

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Sign here: ............................................................ (Company secretary)

Date: 29th July 2016

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 wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

• 2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

• 4 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.

• 5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

• 6 On 10 June 2015, the parent entity MGT Resources Limited issued unsecured convertible notes to Auskong International Mining Investment Co. Limited, with a principal sum of $1,500,000 and a nil interest rate. The Notes were converted into 50,000,000 ordinary shares in MGT Resources Limited on 9[th] June 2016.

On 11 November 2011 the Company received an investment of $1,500,000 in the form of convertible note from Armstrong Industries HK Ltd. The note is

• See chapter 19 for defined terms.

Appendix 5B Page 6

Appendix 5B Mining exploration entity quarterly report

unsecured, has a term of 2 years, a coupon of 8% per annum, and is convertible at 15 cents per share. This note expired on 11 November 2013 and was rolled into a new $1,500,000 convertible note with a term of 3 years, a coupon rate of 8% per annum and a conversion price of $0.0875.

On 16 August 2013 the Company received $3,000,000 from Marvel Network Limited in the form of a 3 year convertible note. Interest on the convertible notes is payable at the rate of 8% per annum. The convertible notes may be redeemed or converted into 27,272,728 ordinary if the share price is 11 cents per share or less at maturity. On 1[st] April 2016, MGT announced that a the agreement of a term sheet for the conversion of the $3,000,000 Marvel Network Limited Convertible Notes into preference shares and options, subject to MGT shareholder approval at a general meeting to be held on or around 23rd June 2016.

On 16 August 2013 the Company received $3,000,000 from Cloud Adventurer Limited in the form of a 3 year convertible note. Interest on the convertible notes is payable at the rate of 8% per annum. The convertible notes may be redeemed or converted into 27,272,728 ordinary if the share price is 11 cents per share or less at maturity. On 1[st] April 2016, MGT announced that a the agreement of a term sheet for the conversion of the $3,000,000 Cloud Adventurer Limited Convertible Notes into preference shares and options, subject to MGT shareholder approval at a general meeting to be held on or around 23rd June 2016.

On 29th March 2016, MGT announced that MGT had issued to Auskong International Mining Investment Co., Limited, one unsecured converting note with the aggregate face value of $2,000,000, subject to shareholder and regulatory approval. On 30 June 2016, following a general meeting of shareholders, the Note was converted into 60,606,061 MGT fully paid ordinary shares at $0.033 per MGT share.

The $2,000,000 invested in MGT by Auskong International Mining Investment Co., Limited was used to purchase 16,949,176 fully paid ordinary shares in Cauldron Energy Limited (ASX: CXU) for $2,000,000 (CXU Share Placement) by MGT. See announcement dated 30[th] March 2016.

There have been no additional convertible notes issued during the Quarter to 30/6/2016.

• 7 There are 452,763,101 fully paid ordinary shares on issue, with 452,763,101 quoted on the ASX as at the end of the quarter to 30/6/2016.

• 8 On 30[th] March 2015, Taimetco International Co., Limited (‘Taimetco’) advanced $750,000 to MGT Mining Ltd as Tranche 1 of the $1,500,000 secured loan agreement entered into and announced to the ASX on 6[th] February 2015. On the 31[st] March 2015, MGT Resources Limited paid MGT Mining Ltd Tranche 2 of $750,000 on behalf of Taimetco International Co., Limited and in settlement of

• See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 7

Appendix 5B Mining exploration entity quarterly report

the termination fee of $750,000 for exiting the off-take agreement between MGT Resources Limited and Taimetco. Following these transactions, the secured loan owing to Taimetco from MGT Mining Limited as at the end of the quarter to 31/3/2015 is $1,500,000.

== == == == ==

• See chapter 19 for defined terms.

Appendix 5B Page 8