BREAKTHROUGH MINERALS LIMITED — Interim / Quarterly Report 2021

Jan 28, 2021

QUARTERLY ACTIVITIES REPORT December 2020

• ➢ Mozambique Gold Fundraising Commences

• ➢ Mozambique Gold Presentation Summary

• ➢ Tancoal Sales and Production Lower

• ➢ Tancoal Coal stocks available to meet demand

• ➢ Decision to transition from Coal production to Gold Development

MOZAMBIQUE GOLD

Intrafrican Resources Limited (“Intrafrican”), a fully owned subsidiary of Intra Energy Corporation Limited ("IEC" or "the Company") registered in Mauritius has invested in Intra Minerals Limited (“IML“), a company registered in Mauritius. Intrafrican currently owns 15% of IML which is the 95% owner of the Lurio Gold Project in Mozambique. Intrafrican has begun fundraising to raise capital by private placement (“Placement”) to increase its equity in IML and to enable IML to continue the exploration program in the Minas Do Lurio Gold Project in Mozambique, predominantly with a drilling campaign.

The Placement will involve the issue of new shares in Intrafrican such that Intrafrican will no longer be a wholly owned subsidiary of IEC. However, IEC will retain a controlling interest in Intrafrican and Intrafrican will increase its ownership interest in IML. As a result, it is expected that the Company’s indirect interest in IML will increase following the Placement.

Intrafrican’s Project Summary and Presentation documents to be shown to potential investors as part of the fundraising are available on IEC and Intrafrican’s websites.

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Quarterly Report to Shareholders – December 2020

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Page | 2 Corporate Head Office:Level 40, 2 Park Street, Sydney 2000 AUSTRALIA

Quarterly Report to Shareholders – December 2020

www.intraenergycorp.com.au

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Photo of the potential 'Muteger' gold trap in the Lurio River subject to exploration and dredging

An independent expert, Benedikt Steiner (CGeol EurGeol) retained by IML to advise on the project has completed a non-JORC technical report. Mr Steiner comments that the project represents a significant first-mover opportunity into a previously unrecognised gold mineralisation trend along the Neoproterozoic Lúrio Belt. Prospecting and early stage exploration campaigns during 2017-2020 have confirmed a shallow exploration target at the Savane locality. Multiple alluvial and eluvial occurrences of free and refractory gold, as well as structurally-controlled bedrock mineralisation, are hosted in quartz veins and occur in deformed granulites and granulitic gneisses. The stacked, 2-7 cm wide quartz veins are generally shallowly (10-20°) dipping and predominantly occur along open East-West trending structural corridors, defined by the intersection of regional shear and thrust faults.

Corporate Head Office:Level 40, 2 Park Street, Sydney 2000 AUSTRALIA

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Summary

High Conviction, De-Risked Gold Investment Opportunity in Mozambique

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Significant first mover opportunity in Mozambique into a previously
unrecognised gold mineralisation trend along the Neoproterozoic Lúrio Belt
Prospecting and exploration activities confirmed the presence of significant
gold occurrences in at least 6 alluvial and hard rock target areas, with
additional targets defined by airborne geophysics and artisanal activity
Shallowly dipping quartz-gold veins represent a possible low cost, low
stripping ratio, open pit mining target in addition to an alluvial operation
Existing mobile mineral processing plant and equipment support the sampling,
crushing and screening of gold bearing materials for early exploration results
Solid project fundamentals, including geology, grades, infrastructure and
committed management team support a consequent progression of the
project through the mining development curve
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2021 Exploration and Development Programme

In order to test and evaluate the currently known exploration targets, and to move towards a first resource estimate in Q4 2021, while at the same time identifying early production targets, IML will require US$1.3M in funding. A further funding of approximately US$800K will be required for production site work including the dredging of gold bearing Lurio River streams. The exploration and development campaign in 2021 will have the principal objectives of:

1. Drill-testing known bedrock gold occurrences at Savane and Chapala:

This will comprise up to 36 RC and 4 DD shallow drillholes, analysis of samples and production of a geological and grade 3D model. Geometallurgical and process mineralogical test work will be undertaken in order to define processing parameters and to enhance the understanding of gold grade recovery.

2. JORC compliant technical reporting :

A JORC compliant technical report of exploration results to date will be compiled and updated with drilling results of the 2021 campaign. A focus will be placed on the implementation of reproducible onsite sample processing workflows and best practice quality control (QC) procedures in order to ensure optimum sampling and commercial laboratory performance.

Corporate Head Office:Level 40, 2 Park Street, Sydney 2000 AUSTRALIA

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3. Improving the license-wide geological setting and target generation strategy:

A license-wide airborne magnetic and radiometric survey is planned to maintain a healthy exploration pipeline, to refine the existing geological map, and to crucially improve the accuracy of mineralisation host structure mapping in known and recently identified target areas. Additional reconnaissance soil sampling will be undertaken to rapidly delineate gold mineralisation potential across prospective structural corridors with an aim to identify dredging targets for early cash generation.

IEC has engaged Mr Kim Stanton-Cook, an exploration/development geologist with 45 years’ experience in mineral exploration industry to act as its consultant in the development of the Lurio Gold Project. Mr Stanton-Cook has reviewed work done to date and has advised that the Project has merit and should move into the drilling stage as soon as possible as a highly prospective project.

4. Preparing for Trial Production:

The exploration programme will identify potential targets and on ground work by contract mining advisors will determine the location of early stage production. The focus will be on the Muteger Site where a number of gold shedding creeks in the river join and drop into a deeper site providing a potential gold trap for development of a dredging operation.

Strategy

Big Picture Five-Pronged Strategy with Mauritius at its core

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Development and Production of Gold “dore” from Minas do Lurio,
#1 Mozambique, and other mining projects conforming to ESG requirements
and low production costs
#2 [Set up Refining plant to process gold “dore” from Minas do Lurio and other ]
ESG compliant and licensed producers into refined gold
Use existing and expanded storage facilities for legitimate gold bullion in
#3
Mauritius
Complete feasibility study for development of a Mint in Mauritius to buy
#4
and mint refined gold into tradeable ingots and currency
International trading in certified gold, storage and potential backing of
#5
Mauritius cryptocurrency
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Corporate Head Office:Level 40, 2 Park Street, Sydney 2000 AUSTRALIA

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TANCOAL ENERGY

Intra Energy Corporation ( IEC ) is the dominant coal supplier to industrial energy users in the Eastern African region. Its 70% owned Tancoal mine in Tanzania which is also 30% owned by the National Development Corporation of Tanzania (NDC) is the largest operational coal mine in Tanzania and East Africa, and is manned exclusively by Tanzanians.

MINING OPERATIONS

IEC Group Production and Sales

	Quarter Ended	Quarter Ended
	Dec-20	Dec-19	Var (%)
Overburden Stripped (bcm)	146,212	619,442	-76.40%
Coal mined (tonnes)	65,069	142,775	-54.43%
Sold (tonnes)	61,246	148,238	-58.68%

Production and sales have been solely from the Tancoal Mine.

IEC Group quarterly sales volumes (as a percentage) by country

			Quarter Ended
		Dec-20	Dec-19
	Tanzania	65.72%	75.48%
	Kenya	10.97%	14.52%
	Rwanda	19.24%	2.72%
	Uganda	4.06%	7.29%

IEC Group quarterly sales volumes (as a percentage) by industry

			Quarter Ended
		Dec-20		Dec-19
	Cement	82.39%		54.89%
	Ceramics	1.78%		32.30%
	Textiles	8.77%		4.44%
	Other	7.06%		8.37%

The cement industry remained the main customer during the quarter. The marketing objective continues to be the lessening dependence on the cement industry and broadening the supply of coal into regional and seaborne industrial and power station markets.

Corporate Head Office:Level 40, 2 Park Street, Sydney 2000 AUSTRALIA

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Tancoal (Tanzania)

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Tancoal's sales for the quarter continued to reduce. This has been due to a variety of factors - the Covid19 shutting regional borders and preventing exports as well as declining industrial production domestically. Several new short term coal mines have emerged and are buying market share at lower prices than Tancoal and the royalty on road transport which has eroded margins from trade and placed pressure on coal prices.

Discussions continue with the Ministry of Minerals for a moratorium on the assessment for past charges for royalty on transport to customers' business premises and discussions are also continuing with the former contractor, Caspian, to extend the payment plan for the three final payments due to tight cash flow from lower sales.

EXPLORATION

Coal exploration is concentrated on tenements being maintained in good standing and supporting mine development work.

Gold exploration continues through an associated company, Intra Minerals Limited (Mauritius) in the Cabo Delgado and Nampula Provinces of Mozambique. The initial gold exploration programme ended with the advent of the the wet season in December/March not January as normally Mozambique is hit by cyclonic activity between January/April. Gold and other minerals are being explored by Intrafrican Resources Limited (Mauritius) which will host the diversification of IEC into mineral exploration and services. It is expected to restart prospecting operations when funds have been raised.

Corporate Head Office:Level 40, 2 Park Street, Sydney 2000 AUSTRALIA

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CORPORATE

Cashflow		Year to Date
	Current Quarter	(6 months)
	A$ ‘000	A$ ‘000
Cash at beginning of the Quarter	(738)	(965)
Operating	501	1,149
Investing	(24)	(51)
Financing	(430)	(836)
Exchange Rate Adjustments	69	81
Cash at end of Quarter	(622)	(622)

• The bank overdraft limit with KCB Bank Tanzania Limited (“KCB”) was US$0.9 million, (A$1.175 million) at 31 December 2020.

• Bank Facilities with KCB Bank of Tanzania were renewed in September 2019 on the same terms and conditions, the renewal process for September 2020 is in progress.

• The appeal of the TRA assessment of VAT to Tancoal, from the commencement of mining to June 2015 of approx. 3 million US dollars of which approx. 50% is interest and penalties, is ongoing.

• The tax investigation unit of the TRA has commenced an audit from the incorporation of the company to the current period, the investigation is ongoing.

• In January 2020, the Prevention and Combating of Corruption Bureau (“PCCB“) commenced an investigation into Tancoal covering the period from the start of the company. Tancoal has not been advised of the reason for the investigation and has provided all documents as requested, the investigation is ongoing.

• The High Court of Tanzania (Commercial Division) in the NBC Bank case ruled in favour of Tancoal (refer ASX announcement 8 April 2019). NBC referred an appeal to the Court of Appeal of Tanzania and all the preliminary steps and processes have been done. The case now awaits a Summons for the date the hearing of the appeal will commence.

Community

• The Mbalawala Women’s Organisation (“MWO”) in Tanzania that has been supported by the company for many years continues to go from strength to strength as their operations expand with the growth of the mine.

• Tancoal’s Corporate Social Responsibility (“CSR”) plan for 2021 has been submitted.

Corporate Head Office:Level 40, 2 Park Street, Sydney 2000 AUSTRALIA

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OUTLOOK

Decision to transition from Coal production into Gold Development

Intrafrican Resources Ltd (IRL), a wholly-owned subsidiary of IEC, is focussed on the development of the Minas Do Lurio gold resource by Intra Minerals Ltd (IML) in Mozambique. IML has a strong exploration and development team in Mozambique led by Mr Winston Theler, the Chief Operating Officer and Mrs Benedicta Gräfin Von Schall-Riaucour, the Chief Administrative Officer. Mr Jim Shedd, the CEO of IEC has relocated from Tanzania to Mozambique to represent IRL interests and oversee the mining project. IRL is intending to raise US$2.5 Million representing 25% of its share capital by way of private placement. The capital raising commenced in December 2020.

IRL has entered into an Investment Agreement with IML to acquire additional equity and has understandings with current related party shareholders to enable it to position IML as a subsidiary of IRL. US$2.175 Million will be injected into exploration and development by IML to identify early dredging and mining targets for production and cashflow generation while working towards a JORC resource in the Minas Do Lurio concession. IML is in contact with other gold concession holders in Mozambique, one of the less explored countries in Africa with huge potential and a Government keen on mining development. Mauritius is an ideal base for African activities as the most business friendly country in Africa and has a double tax and investment protection treaties with Mozambique. There is also strong potential for a gold refinery and possibly a mint in Mauritius to service legitimate gold producers in Africa.

The performance of Tancoal Energy Limited (Tancoal) has disappointed due to loss of market, unfair imposts and border restrictions although its potential in the longer term as a significant producer for Tanzania cannot be doubted. As the gold development now has assumed greater importance to IEC, the Board has decided to position IEC as a gold developer, producer, refiner and trader and move away from coal altogether. While acknowledging the importance of coal to developing economies, it has become a difficult business to raise funds and support because of its environmental handicaps. IEC will therefore look at alternatives including partnerships and equity reduction in coal as it transitions as an experienced mining group into gold development.

For further information please contact:

Shareholder Enquiries

Jim Shedd Chief Operating Officer Intra Energy Corporation Limited info@intraenergycorp.com.au www.intraenergycorp.com.au

Corporate Head Office:Level 40, 2 Park Street, Sydney 2000 AUSTRALIA

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IEC - SCHEDULE OF MINING AND PROSPECTING TENEMENTS

IEC - SCHEDULE OF MINING AND PROSPECTING TENEMENTS	IEC - SCHEDULE OF MINING AND PROSPECTING TENEMENTS	IEC - SCHEDULE OF MINING AND PROSPECTING TENEMENTS	IEC - SCHEDULE OF MINING AND PROSPECTING TENEMENTS	IEC - SCHEDULE OF MINING AND PROSPECTING TENEMENTS	IEC - SCHEDULE OF MINING AND PROSPECTING TENEMENTS	IEC - SCHEDULE OF MINING AND PROSPECTING TENEMENTS
Tenement ID	Country	Company	% Ownership	Locality	Minerals	Status
PL 7620/2012	Tanzania	Tancoal	100	Mbuyura/Mkapa	coal	2ndRenewal pending
PL 7713/2012	Tanzania	Tancoal	100	Mhukuru	coal	active
PL 8999/2013	Tanzania	Tancoal	100	Mbalawala East	coal	active
ML 439/2011	Tanzania	Tancoal	100	Tancoal	coal	Active
PL 7391/2011	Tanzania	Tancoal	100	Mbalawala	coal	active
ML/608/2019	Tanzania	Tancoal	100	Mbuyura/Mkapa	coal	ML Application recommended
ML/609/2019	Tanzania	Tancoal	100	Mbuyura	coal	ML Application recommended
ML610/2019	Tanzania	Tancoal	100	Mbalawala	coal	Active
PL 11156/2017	Tanzania	Tancoal	100	Mbinga/Ruvuma	coal	Active
PL 11086/2016	Tanzania	Tancoal	100	Mbinga/Ruvuma	coal	Active
PL 13996/2019	Tanzania	Tancoal	100	Mbinga/Ruvuma	coal	Active
PL 10116/14	Tanzania	Tanzacoal	100	Songwe/Kiwira	coal	Active
PL10975/2016	Tanzania	Intra Energy (Tanzania)	100	Dodoma	lithium	Active
PL/10979/2016	Tanzania	Intra Energy (Tanzania)	100	Morogoro	graphite	Active

Tancoal is owned 70% by IEC

Corporate Head Office:Level 40, 2 Park Street, Sydney 2000 AUSTRALIA

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