Celsius Resources Limited — Interim / Quarterly Report 2017

Oct 30, 2017

ASX RELEASEASX RELEASEASX RELEASE | 31 October | 16 February 2017 | 20 April 2017

QUARTERLY ACTIVITIES REPORT

SEPTEMBER 2017

Opuwo Cobalt Project, Namibia (CLA 95%)

Celsius Moves to Immediate 95% Interest in Opuwo and Acquires Surrounding Licences

During the Quarter, Gecko Namibia and Celsius entered into an acquisition agreement (“Acquisition Agreement”) pursuant to which Celsius moved to a 95% interest in EPL 4346 (through its shareholding in Gecko Cobalt Holdings (Pty) Ltd) in consideration for issuing Gecko with 31,250,000 shares in Celsius. Celsius was previously earning a 76% interest in the Project via staged expenditure, with a call option providing the ability for Celsius to acquire an additional 20% from Gecko Namibia (Pty) Ltd (“Gecko”) for AUD 1.25 million, prior to the completion of a Bankable Feasibility Study.

Additionally, Gecko agreed to sell Celsius a 95% interest in three surrounding licences in the Opuwo region (the “Additional EPLs”), covering approximately 782 km[2] , taking the contiguous landholding of the expanded Celsius owned Opuwo Project to approximately 1,470 km[2] , for consideration of 12,500,000 shares in Celsius. The remaining 5% in all project licences will be retained by Amor Investments (Amor), a local Namibian Company owned by historically disadvantaged Namibians.

Highly Prospective New Licences

Celsius has so far defined mineralisation over approximately 15 km of strike, of a potential total of 30 km, at the existing Opuwo licence, EPL 4346. The new licences acquired by Celsius extend the prospective cobalt and copper stratigraphic horizon to over 100 km. Historical sampling and laboratory assays over this additional strike zone, consisting of just 16 samples, yielded results of up to 8.3% copper and 0.32% cobalt , illustrating the high potential to identify further cobalt and copper mineralisation on the new licences. Details of the available historical sampling are provided in Table 1.

The expansion of the land position at Opuwo allows Celsius to explore for possible source zones and additional cobalt-copper mineralisation in the vicinity of the known DOF mineralisation. To this end, an airborne electromagnetic survey is planned for 2018 to identify possible accumulations of massive sulphides and potential extensions to the known Dolomite Ore Formation (DOF) cobalt-copper mineralisation. This survey will include the new licences.

In addition to the cobalt-copper mineralisation investigated by Celsius to date, and other similar targets, the new licences are considered to have significant potential for other commodities including zinc-lead-vanadium (Otuziru Prospect), copper-gold (Chirumbu Prospect), chromium-vanadium (Jimi Prospect) and lead-zinc-silver (NOTZ Prospect) (Figure 1).

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Figure 1: Expanded Licence Position

Initial Reconnaissance Drilling Program

The Company’s maiden drilling program was completed at the Project during the Quarter, which was successful in identifying cobalt-copper mineralisation over more than 15 km of strike (Figure 2, Table 2).

As previously reported, significant intercepts from each hole, using a cutoff grade of 0.05% cobalt, were:

• 19 m @ 0.13% cobalt and 0.62% copper , from 87 m, including 7 m @ 0.13% cobalt and 1.11% copper , from 87 m (DOFR04)

• 13 m @ 0.14% cobalt and 0.51% copper, from 125 m, including 10 m @ 0.17% cobalt and 0.66% copper, from 125 m, including 3 m @ 0.23% cobalt and 0.46% copper, from 132 m (DOFR40)

• 10 m @ 0.14% cobalt and 0.43% copper , from 62 m (DOFR22)

• 7 m @ 0.17% cobalt and 0.49% copper , from 66 m, including 2 m @ 0.31% cobalt and 0.41% copper , from 69 m (DOFR06)

• 7 m @ 0.16% cobalt and 0.64% copper, from 88 m (DOFR08)

• 7 m @ 0.13% cobalt and 0.53% copper , from 54 m (DOFR10)

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• 7 m @ 0.11% cobalt and 0.47% copper, from 148 m, including

• 2 m @ 0.17% cobalt and 0.53% copper, from 152 m (DOFR33)

• 6 m @ 0.17% cobalt and 0.52% copper , from 71 m, including 4 m @ 0.23% cobalt and 0.62% copper , from 73 m (DOFR21)

• 6 m @ 0.13% cobalt and 0.64% copper , from 147 m (DOFR26)

• 6 m @ 0.13% cobalt and 0.37% copper, from 56 m (DOFR14)

• 6 m @ 0.12% cobalt and 0.55% copper , from 46 m (DOFR03)

• 6 m @ 0.10% cobalt and 0.39% copper , from 53 m (DOFR39)

• 5 m @ 0.20% cobalt and 0.52% copper, from 80 m (DOFR12)

• 5 m @ 0.18% cobalt and 0.55% copper from 84 m, including 3 m @ 0.21% cobalt and 0.68% copper from 85 m (DOFR28)

• 5 m @ 0.15% cobalt and 0.44% copper , from 57 m (DOFR11)

• 5 m @ 0.14% cobalt and 0.53% copper , from 76 m (DOFR09)

• 5 m @ 0.13% cobalt and 0.36% copper , from 173 m (DOFR27)

• 5 m @ 0.12% cobalt and 0.66% copper, from 87 m (DOFR19)

• 4 m @ 0.15% cobalt and 0.80% copper , from 41 m (DOFR07)

• 4 m @ 0.14% cobalt and 0.56% copper, from 26 m (DOFR24)

• 4 m @ 0.14% cobalt and 0.53% copper , from 153 m (DOFR32)

• 4 m @ 0.14% cobalt and 0.51% copper , from 85 m (DOFR31)

• 4 m @ 0.13% cobalt and 0.57% copper , from 44 m (DOFR05)

Remaining assays from this initial drilling program have been received and are currently being compiled and interpreted. These results include an area where additional Dolomite Ore Formation (DOF) was discovered in two drill holes located approximately 350 metres north of the known and mapped mineralisation. The significance of this occurrence is currently being evaluated.

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Figure 2: Drilling Assay Results extending mineralised strike to 15 km

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Resource Drilling Program

Subsequent to the end of the Quarter, the Company announced the commencement of an approximately 15,000 metre drilling program, with three Reverse Circulation and two Diamond rigs to complete the program, concluding in mid-December. Assay results are expected to be received from late-November, and into December and January. Resource reporting is targeted for the first Quarter of 2018.

The resource drilling program is targeting two key areas, with strike lengths of 5 km and 4.2 km, that have been identified in the wide spaced drilling conducted by Celsius earlier this year (Figure 3). The program is designed to convert a significant portion of the initial exploration target, consisting of between 33 and 41 million tonnes, grading approximately 0.13% - 0.17% cobalt and 0.45% - 0.65% copper , to a JORC Mineral Resource. It is noted that the potential quantity and grade is conceptual in nature, and that there has been insufficient exploration to estimate a Mineral Resource, and it is uncertain if further exploration will result in the estimation of a Mineral Resource. (Please refer to ASX release of 18 May, 2017 for details, including information required under the JORC Code (2012) on the Exploration Target).

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4.2 km Target Area
5 km Target Area
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Figure 3: Resource Drilling focus areas.

Metallurgy and Mineralogy Testing Program

The metallurgical test work program currently being conducted at SGS Australia has focused on recovering the sulphide minerals into a concentrate. To assist in optimising this program, QEMSCAN analysis was conducted on a representative drill core sample to identify the cobalt, copper and zinc minerals that comprise the mineralisation. This analysis indicates that the cobalt mineral present is the cobalt sulphide mineral linnaeite (Co3S4), with copper present as chalcopyrite. These results are in line with expectations, and are expected to allow a mineral concentrate to be created from the mineralisation though conventional flotation techniques.

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The Company looks forward to providing further details on the metallurgical test work program results as they become available in November.

Opuwo Scoping Study

Perth based Orway Mineral Consultants (“OMC”) have been engaged to design and supervise the metallurgical test work program, with test work being conducted in Perth by SGS Australia. The work is being supervised by Mr. Grenvil Dunn of Hydromet Pty Ltd, who has particular relevant experience in African cobalt and copper ores. The Scope of Work includes:

• Testwork definition and analysis for comminution and flotation scouting;

• Circuit selection, equipment sizing and engineering design;

• Capital and operating cost estimates (accuracy +/- 50%).

Auralia Mining Consulting (Auralia) have been appointed to evaluate the mining methods and costs associated with possible development of the Project. The Company’s joint venture partner, Gecko Namibia, is providing local costing data to optimise these studies. Auralia is a boutique mining consultancy whose principals have extensive experience in sub-Saharan Africa, including work on projects in Zambia and South Africa. They have also completed recent studies into Australian cobalt projects.

Baseline environmental studies have been initiated at the Project by the Company’s consultants.

Table 1: Results from historical sampling on new licences

Sample Name	UTM Zone 33S Easting (m)	UTM Zone 33S Northing (m)	Co(ppm)	Cu(%)	Comment
KK1644 KK1645 K046 KK1614 KK1631 V02 V03 V05 OVWR1 OVWR2 RCC1-1 RCC1-2 RCC1-3 EWIS HZWIS BZIS	350374.0 351265.6 351276.3 353584.3 352897.9 389326.0 388996.0 388974.8 388622.3 388643.5 404503.0 404311.0 404321.6 398120.0 378417.7 365926.5	8027128.2 8026957.9 8026946.9 8027296.1 8026959.0 8037940.3 8038181.9 8038170.7 8038633.5 8038633.6 8034887.5 8035130.0 8035119.0 8049638.4 8037500.5 8037520.0	241 1773 4.9 54.8 3200 180 12 14 1.4 1.6 10 4 12 0.7 86.7 2.4	0.84 0.01 0.00 0.07 0.36 0.00 0.25 8.30 1.57 2.54 0.02 0.94 0.10 6.23 4.06 1.64	Pb - 1.67% Au - 1.09g/t

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Table 2: Drilling Results, Opuwo Cobalt Project

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Easting Northing Final
(UTM (UTM Azimuth Depth Intercept Intercept Interval Cobalt Copper Zinc Manganese
Hole ID Zone 33S) Zone 33S) Dip (mag) (m) From (m) To (m) (m) (%) (%) (%) (%)
DOFR03 365148 8026718 -55 180 58 46 52 6 0.12 0.55 0.39 1.43
DOFR04 365148 8026720 -90 180 112 87 106 19 0.13 0.62 0.71 1.75
including 87 94 7 0.13 1.11 1.10 1.53
DOFR05 366981 8026370 -55 180 55 44 48 4 0.13 0.57 0.45 1.69
DOFR06 366981 8026373 -90 180 86 66 73 7 0.17 0.49 0.61 1.92
including 69 71 2 0.31 0.41 1.13 3.17
DOFR07 367745 8026254 -55 180 50 41 45 4 0.15 0.80 0.62 1.91
DOFR08 367742 8026266 -90 180 99 88 95 7 0.16 0.64 0.61 1.69
DOFR09 366049 8026549 -55 180 87 76 81 5 0.14 0.53 0.45 1.59
DOFR10 366060 8026497 -90 180 66 54 61 7 0.13 0.53 0.62 1.57
DOFR11 370176 8026304 -55 180 70 57 62 5 0.15 0.44 0.48 1.58
DOFR12 370176 8026305 -90 180 90 80 85 5 0.20 0.52 0.61 1.83
DOFR13 372034 8026137 -55 180 50 37 40 3 0.09 0.24 0.63 1.17
DOFR14 372034 8026138 -85 180 70 56 62 6 0.13 0.37 0.28 1.8
DOFR15 374531 8025781 -55 200 130 No Significant Intercept (missed DOF horizon)
DOFR16 374421 8025771 -55 200 70 11 17 6 0.08 0.22 0.18 0.83
and 19 21 2 0.09 0.28 0.13 1.39
DOFR17 374422 8025788 -90 200 70 No Significant Intercept (below 500ppm reporting cutoff grade)
DOFR18 368497 8026351 -55 180 117 No Significant Intercept (missed DOF horizon)
DOFR19 368526 8026224 -55 180 99 87 92 5 0.12 0.66 0.42 1.53
DOFR20 368497 8026469 -55 180 80 29 32 3 0.11 0.33 0.39 2.08
DOFR21 364229 8026530 -55 180 87 71 77 6 0.17 0.52 0.75 1.76
including 73 77 4 0.23 0.62 0.71 1.91
including 75 76 1 0.39 0.65 1.33 2.32
DOFR22 364232 8026504 -90 180 81 62 72 10 0.14 0.45 0.47 1.53
DOFR23 363667 8025977 -55 135 41 23 26 3 0.11 0.39 0.44 2.09
DOFR24 363667 8025980 -90 135 40 26 30 4 0.14 0.56 0.54 2.31
DOFR25 360902 8026568 -55 200 200 No Significant Intercept (missed DOF horizon)
DOFR26 365187 8026845 -55 180 170 147 153 6 0.13 0.64 0.61 1.82
DOFR27 365187 8026844 -75 180 184 173 178 5 0.13 0.36 0.47 1.81
DOFR28 362029 8026240 -55 200 93 84 89 5 0.18 0.55 0.69 2.06
including 85 88 3 0.21 0.68 0.86 2.55
DOFR29 362709 8026133 -55 200 189 180 183 3 0.12 0.48 0.59 1.86
DOFR30 358774 8026077 -55 200 181 No Significant Intercept (missed DOF horizon)
DOFR31 363577 8025781 -55 200 96 85 89 4 0.14 0.51 0.73 1.91
DOFR32 366065 8026655 -55 180 162 153 157 4 0.14 0.53 0.52 1.53
DOFR33 366064 8026654 -75 180 165 148 155 7 0.11 0.47 0.50 1.62
including 152 154 2 0.17 0.53 0.65 2.50
DOFR34 361175 8026001 -55 40 228 No Significant Intercept (missed DOF horizon)
DOFR35 361673 8026389 -55 200 179 170 171 1 0.08 0.53 0.39 1.53
DOFR36 368860 8024691 -75 180 150 No Significant Intercept
DOFR37 368845 8024216 -75 180 150 No Significant Intercept
DOFR38 363250 8025960 -55 180 170 161 164 3 0.12 0.40 0.51 1.30
DOFR39 373527 8025932 -55 180 70 53 59 6 0.10 0.39 0.08 1.34
DOFR40 373525 8025936 -90 180 147 125 138 13 0.14 0.51 0.09 1.26
including 125 135 10 0.17 0.66 0.10 1.54
including 132 135 3 0.23 0.46 0.11 1.51
DOFD41 365144 8026720 -90 180 122 Results Pending
DOFD42 364231 8026531 -55 180 80.46 Results Pending
DOFR43 360837 8026366 -55 30 120 No Significant Intercept (missed DOF horizon)
DOFR44 374379 8026090 -55 180 70 41 43 2 0.21 0.50 0.35 1.24
DOFR45 374379 8026093 -90 180 69 58 62 4 0.11 0.29 0.38 1.39
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Table 2: Drilling Results, Opuwo Cobalt Project (continued)

Hole ID	Easting (UTM Zone 33S)	Northing (UTM **Zone 33S) **	Dip	Azimuth (mag)	Final Depth (m)	Intercept From (m)	Intercept To (m)	Interval (m)	Cobalt (ppm)	Copper (%)	Zinc (%)	Manganese (%)
DOFR46	375393	8026015	-55	180	200	Results Pending
DOFR47	361483	8025183	-55	180	190	Results Pending
DOFR48	366737	8026948	-55	210	200	Results Pending
DOFD49	370176	8026305	-90	135	95.49	Results Pending
DOFR50	366570	8026762	-55	210	99	Results Pending
DOFR51	371146	8026225	-55	180	100	Results Pending
DOFR52	369440	8026385	-55	180	49	Results Pending

Notes: Significant intersections reported using a cutoff grade of 0.05% cobalt (500 ppm) Previous announcements reported cobalt in ppm (1,000 ppm = 0.1%)

Note: Please refer to ASX releases dated July 3, 2017 and September 4, 2017 for further detail regarding these assay results.

Abednegno Hill Project, WA (CLA 100%)

The Abednegno Hill Nickel Project is located to the south and west of Minara Resources’ Murrin Murrin nickel mine.

A ground electromagnetic (EM) survey commenced on the Project subsequent to the end of the Quarter, with results to be available during the December Quarter.

Carnilya Hill Project, WA (CLA 30%)

Celsius (through View Nickel Pty Ltd) owns a 30% joint venture interest in the Carnilya Hill Joint Venture in Western Australia with Mincor Resources NL. Mincor Resources NL (ASX:MCR) is the operator of the Carnilya Hill JV. No activity was reported by Mincor during the quarter.

Corporate

The Managing Director of Gecko Namibia, Mr. Pine van Wyk, joined the board of Celsius during the Quarter, as a non-executive director.

Pine van Wyk (NHD Met. Eng., B.Com, MBA) is a Metallurgical Engineer by profession, with extensive experience in the mining industry, particularly in developing and operating mines in Namibia. He holds commercial qualifications (B.Com and MBA), with a focus on project management. He spent eight years at Rössing Uranium, where his roles included Superintendent Acid Plant and Metallurgical Services, Superintendent Strategic Projects and Engineering Manager. In 2005, he joined Paladin Energy Ltd at their

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Langer Heinrich Uranium project as Operations Manager, taking the project from feasibility to full production. In 2008 he joined Gecko Namibia as Director Projects and in 2014 became Managing Director of the Gecko Namibia group of companies.

Subsequent to the end of the Quarter, Celsius announced a capital raising of approximately $3.9 million, at an issue price of 5.5 cents per share. The Placement was heavily oversubscribed and attracted strong interest from a large number of domestic and international institutional and professional investors. Project vendor and substantial shareholder, Gecko Namibia, elected to participate in the capital raising, increasing their percentage ownership in the Company as a result.

At the end of the Quarter, the Company held approximately $3.3 million in cash reserves. The cash balance will be boosted by approximately $3.9 million (less costs) upon completion of the capital raising mentioned above.

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Celsius Resources Contact Information

Level 3, 216 St Georges Terrace Perth WA 6000 PO Box 7775 Cloisters Square Perth WA 6850 P: +61 8 9226 4500 F: +61 8 9226 4300 E: info@celsiusresources.com.au www.celsiusresources.com.au

Competent Persons Statement

Information in this report relating to Exploration Results is based on information reviewed by Mr. Brendan Borg, who is a Member of the Australasian Institute of Mining and Metallurgy and Managing Director of Celsius Resources. Mr. Borg has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined by the 2012 Edition of the Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. Borg consents to the inclusion of the data in the form and context in which it appears. The Exploration Results are based on standard industry practices for drilling, logging, sampling and assay methods, including quality assurance and quality control measures, as reported in various ASX announcements during April to September, 2017.

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