CONICO LTD — Interim / Quarterly Report 2019

Oct 28, 2019

ACN 119 057 457

ASX QUARTERLY REPORT FOR PERIOD ENDED 30TH SEPTEMBER 2019

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HIGHLIGHTS:

MT THIRSTY COBALT PROJECT:

• Spring level 2 flora and vegetation survey completed

• SO2 leaching testwork completed

• Mine planning and tailings engineering underway

• Pre-feasibility study in final stages of engineering

CORPORATE:

• Pro Rata Non-Renounceable Rights Issue raised $326,399

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Figure 1: Mt Thirsty Project Location

Level 15, 197 St George’s Terrace, Perth, Western Australia 6000 Telephone: (08) 9282 5889 Facsimile: (08) 9282 5866 Website: www.conico.com.au

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MT THIRSTY COBALT PROJECT

(50% Conico Ltd: 50% Barra Resources Ltd– Joint Venture, MTJV )

The Mt Thirsty Cobalt Project is located 16km north-northwest of Norseman, Western Australia (Figure 1).

The Project contains the Mt Thirsty Cobalt-Nickel (Co-Ni) Oxide Deposit that has the potential to emerge as a significant cobalt producer. In addition to the Co-Ni Oxide Deposit, the Project also hosts nickel sulphide (Ni-S) mineralisation.

Demand for cobalt looks very encouraging as the world becomes more dependent on rechargeable power sources for portable electronics and electric vehicles. In addition, the battery industry is also competing with demand for cobalt from producers of superalloys, aircraft turbines and chemical industries.

The undeveloped Mt Thirsty Cobalt Project has a significant resource with a potential to have a long mine life. The Project is close to all necessary infrastructure (rail, road, power, water, and sea port) and, being in a mining orientated state, has the potential to attract a variety of interested parties including end users of cobalt. Mt Thirsty has the potential to become a major supplier to the burgeoning battery supply chain.

The great advantage of Mt Thirsty compared to other potential cobalt operations is the nature of the resource, being a flat lying, continuous and thick deposit starting from near surface to around 70 metres below surface. Due to intense oxidation, the deposit is very soft, fine grained and low in silica.

The Mount Thirsty Joint Venture (MTJV) is progressing a Pre-Feasibility Study (PFS) on the project utilising industry leading consultants led by Amec Foster Wheeler Australia Pty Ltd, trading as Wood.

The Mt Thirsty Project is highly leveraged to cobalt prices with approximately 80% of potential revenue being from cobalt; far higher than other nickel laterite projects.

Conico Ltd is the operator of the MTJV and the Joint Venture has appointed Mr Sean Gregory, MD and CEO of Barra Resources Ltd as Manager of the Mt Thirsty Project Prefeasibility Study (PFS).

ACTIVITIES

Mineral Resource Estimate

The Mt Thirsty Mineral Resource was further upgraded during the quarter to 26.9Mt @ 0.12% cobalt and 0.52% nickel (Table 1).

The upgrade was as a result of checks during mine planning and resulted in a useful increase in contained metal of 4.7%.

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Table 1: Mt Thirsty Mineral Resource Summary (0.06% Co cut off). Previously reported results shown in square brackets. Minor discrepancies in totals due to rounding.

	Dry Tonnes (Mdt)	Cobalt (%)	Nickel (%)
Mt Thirsty Indicated	22.8	0.121	0.53
Mt Thirsty Inferred	2.5	0.103	0.45
Mt Thirsty Sub Total	25.4	0.119	0.52
Mt Thirsty North (Inferred)	1.5	0.092	0.55
Mt Thirsty Total	26.9	0.117	0.52

Further Metallurgical Testwork

Additional variability leaches were completed at the upper and lower end of the grade ranges expected. Seventeen variability leaches have now been completed on samples with head grades ranging from 0.03% cobalt to 0.43% cobalt. The variability leaches have confirmed strong correlations between cobalt head grade and cobalt and nickel extraction (Figures 3 and 4). The relationship is logarithmic, with very high extractions at high grades and leaching performance dropping off below the resource cutoff grade of 0.06% cobalt.

These simple regressions produced higher correlations than more complex multiple non-linear regressions assessed on a domain-by domain basis.

The variability leaches are in addition to the six bulk leaches, twenty four optimisation leaches and eight beneficiation leaches completed during the PFS and fifteen SO2 leaches in the scoping study, bringing the total number of SO2 leaches completed to fifty five, with remarkably robust performance, giving confidence in the leaching method proposed.

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Figure 3: Cobalt extractions and regressions from variability leaches.

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Figure 4: Nickel extractions and regressions from variability leaches.

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Bulk Leaches 4, 5 and 6 have been completed. The results are shown in Table 2 below.

Table 2: Mt Thirsty Bulk Leaches

BL	Test ID	Co extraction (%)	Ni extraction (%)	Fe in sol’n (g/l)
1	HY7334	85.43	30.45	11.7
2	HY7460	82.52	27.38	1.3
3	HY7556	83.36	26.57	2.2
4	HY8147	83.74	36.85	13.0
5	HY8190	85.78	35.30	8.1
6	HY8189 (lower grade)	68.61	20.46	3.0

Bulk Leaches 1-4 and 6 were completed on the Master Composite (0.18% Co) derived from 2016 Reverse Circulation (RC) drilling using pure SO2 and O2 gas to allow the conditions to be accurately optimised. Pleasingly, Bulk Leach 5 using dilute SO2 gas more typically available in operations delivered the best result yet. Bulk Leach 6 was on a lower grade composite (0.12% Co) derived from 2018 Air Core (AC) drilling that performed as expected based on the variability leaches as plotted on Figures 3 and 4.

Conservatively, the PFS will average the extractions from Bulk Leach 3 and Bulk Leach 5 as there is only one test using dilute SO2. This also moderates the nickel extraction to reflect the economic target of leaching 5 g/l iron.

The bulk leach extractions selected have been used to adjust the regressions charted in Figures 3 and 4. This results in an increase in cobalt extraction of about 6% which fairly represents the gains made during optimisation between the variability leaches and the bulk leaches. The nickel recoveries will be adjusted 6% downwards using the same method and reflective of the excess iron leaching that occurred in the variability leaches.

Primary and secondary neutralisation tests have all been completed without any significant losses of payable metals. Mixed Sulphide Precipitation testwork is now the only metallurgical test work outstanding. It is hoped that the working assumption of 4% losses at this step can be significantly bettered.

Mine Planning

Mine planning studies have locked down the preferred Whittle shell based on the regressions above and preliminary operating cost estimates, which shows good utilisation of the available Mineral Resources. Detailed pit designs have commenced, and scheduling will follow.

Tailings Studies

A tailings sample has undergone testing with results showing that the tailings settle slowly, leading the preferred solution towards a downstream twin-cell tailings dam. Mine waste will be directed to construct the tailings dam walls as required.

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Land Access

Following on from the Spring 2018 Level 1 Flora and Fauna survey, a Level 2 Flora and Vegetation survey was completed by Spectrum Ecology during September 2019. The survey did not identify any rare plants or animals and will be suitable to support approvals for the project.

Granted tenure, land access agreements and program of works approvals are now in place for water search drilling for the project.

Tenement applications for mining, roads and infrastructure are also moving through the process towards grant.

Discussion are continuing with the Ngadju Traditional Owners towards a Native Title agreement.

Cobalt-Nickel Market

The MTJV’s progressive work is being undertaken against a backdrop of volatile commodity price movements with Nickel to a healthy US$16,000 per tonne. However, Cobalt has suffered a precipitous fall from as high as $95,000 per tonne in March 2018 to as low as $26,000 per tonne in August 2019. With recent mine closures announced by Glencore in the Democratic Republic of Congo, we believe this has signaled the bottom of the market and we have seen a 38% rally in the cobalt price over the last 8 weeks to US$36,000 per tonne today. On 8th September 2019, Citi Bank published their comprehensive “Electric Vehicle Metals & Equities Outlook” which picked cobalt as the commodity most leveraged into the electric vehicle revolution. They have forecast in their base case that cobalt prices will further double to US$70,000 per tonne into the long-term. Our share price is heavily geared towards the cobalt price recovery underway and predicted to continue.

Many commentators have now identified nickel as a commodity to watch during 2019. Nickel LME inventory levels halved from approximately 400,000t to 200,000t during 2018 and have further halved to less than 100,000t in 2019. Growth in use of stainless steel has been strong, and when the demand from the battery industry is overlayed, nickel demand is expected to outstrip supply.

The fundamentals of the cobalt and nickel markets connected to electric vehicle uptake remains as compelling as ever. EVvolumes.com report that year-to-date-August plug-in vehicles sales in the world’s largest car market, China, are up 44% year on year. There is some pullback from the planned reduction in government subsidies, but 2019 is still forecast as 1.5-1.6 million electric vehicle sales in China, a 33% increase on 2018 calendar year.

Longer term, the fundamentals of the cobalt and nickel markets remain exceptional with very few high-quality projects such as Mt Thirsty being expected to be available to meet the demand driven by electric vehicles.

Next Steps

Final Mixed Sulphide precipitation test work is underway. Wood are completing their capital and operating cost estimation. Golder are designing the tailings dam for the project and Snowden are scheduling the mine plan.

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CORPORATE

Pro Rata Non-Renounceable Rights Issue

During the quarter a non-renounceable pro-rata rights offer to Conico shareholders raised $326,399.68 through the issue of 32,639,968 shares at $0.01 each.

The funds will be used towards continuing to progress the Mt Thirsty pre-feasibility study and for general working capital.

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Guy T Le Page Director

Disclaimer

The interpretations and conclusions reached in this report are based on current geological theory and the best evidence available to the authors at the time of writing. It is the nature of all scientific conclusions that they are founded on an assessment of probabilities and, however high these probabilities might be, they make no claim for complete certainty. Any economic decisions that might be taken based on interpretations or conclusions contained in this report will therefore carry an element of risk.

This report contains forward-looking statements that involve a number of risks and uncertainties. These forwardlooking statements are expressed in good faith and believed to have a reasonable basis. These statements reflect current expectations, intentions or strategies regarding the future and assumptions based on currently available information. Should one or more of the risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary from the expectations, intentions and strategies described in this report. No obligation is assumed to update forward-looking statements if these beliefs, opinions and estimates should change or to reflect other future developments.

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Competent Persons Statements

The information in this report that relates to Exploration Results for the Mt Thirsty project is based on and fairly represents information compiled by Michael J Glasson, a Competent Person who is a member of the Australian Institute of Geoscientists. Mr Glasson is an employee of Tasman Resources Ltd and in this capacity acts as part time consultant to Conico Ltd and the MTJV. Mr Glasson holds shares in Conico Ltd.

The information in this report which relates to the metallurgical test-work for Exploration Results for the Mt Thirsty Cobalt-Nickel Project is based on and fairly represents information compiled by Mr Dean David who is a Member of the Australian Institute of Mining and Metallurgy and a full-time employee of Wood. Mr David consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report which relates to Mineral Resources at the Mt Thirsty Cobalt-Nickel Project is based on information provided to and compiled by Mr David Reid, a Competent Person who is a full-time employee of Golder Associates Pty Ltd, and a Member of the Australasian Institute of Mining and Metallurgy.

Messer’s Glasson, David, and Reid have sufficient relevant experience to the style of mineralisation and type of deposits under consideration and to the activity for which they are undertaking to qualify as a Competent Person as defined in the JORC Code (2012 Edition).

The company is not aware of any new information or data that materially affects the information presented and that the material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed. The company confirms that the form and context in which the Competent Persons’ findings are presented have not been materially modified from the original market announcements.

Interests in Mining Tenements

Tenements	Location	Interest held at end of quarter	Acquired during the quarter	Disposed during the quarter
E63/1267	WA	50%
R63/4	WA	50%
E63/1790	WA	50%
P63/2045	WA	50%
M(A)63/669*	WA	50%
M(A)63/670#	WA	50%
G(A)63/93^	WA	50%
L63/80	WA	50%
L63/81	WA	50%
L(A)63/91	WA	50%
L(A)63/92	WA	50%

Notes:

*MLA over P63/1267,[#] MLA over R63/4,[^] GLA over E63/1790 & P63/2045

LA 63/91&92 for haul roads and services. L63/80 & 81 for ground water search.

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JORC Code, 2012 Edition – Table 1 report

Section 1 Sampling Techniques and Data

(Criteria in this section	(Criteria in this section	applyto all succeedingsections.)
Criteria	JORC Code explanation		Commentary
Sampling techniques	•	Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under	• •	1m samples were split and collected at the drill rig. The remainder of the drill cuttings were immediately bagged and sealed in air tight bags to minimise drying
		investigation, such as down hole gamma sondes, or		and agglomeration of the clays. These samples were
		handheld XRF instruments, etc). These examples should not		later used for compositing and metallurgical test-work.
		be taken as limiting the broad meaning of sampling.	•	The split samples were then dried and pulverised and a
	•	Include reference to measures taken to ensure sample		40gm sub sample analysed for Co, Ni, Mn, Zn, Mg, Al &
		representivity and the appropriate calibration of any		Fe using a four-acid digest with an ICP OES finish.
		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 (eg ‘reverse circulation drilling
		was used to obtain 1 m samples from which 3 kg was
		pulverised to produce a 30 g 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 (eg
		submarine nodules) may warrant disclosure of detailed
		information.
Drilling techniques	•	Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond	• •	RC drilling was completed with a 165mm face sampling hammer. AC Drilling was completed with a 102mm blade bit. The
		tails, face-sampling bit or other type, whether core is		cuttings are lifted to the surface up the inner tube of the
		oriented and if so, by what method, etc).		drill bit in the same manner as RC drilling.
			•	All drilling was above the water table and there was no
				water injection used.
Drill sample recovery	• •	Method of recording and assessing core and chip sample recoveries and results assessed. Measures taken to maximise sample recovery and ensure	•	Sample recovery was generally excellent in dry powdery clay which hosts the upper portion of the mineralisation. Any intervals with obvious poorer sample recovery were
		representative nature of the samples.		recorded in the logs. These were mostly in greenish
	•	Whether a relationship exists between sample recovery		puggy clay sections beneath the oxidised zone in the
		and grade and whether sample bias may have occurred		lower portion of the deposit.
		due to preferential loss/gain of fine/coarse material.	•	The cyclone was cleaned between each six metre rod
				(RC) and three metre rod (AC) and every metre for wet
				samples; riffle splitters were cleaned as required. There
				is no obvious relationship between grade and sample
				recovery. Most of the material drilled is strongly
				weathered, soft and fine grained. No significant sample
				bias is expected to have occurred due to preferential
				loss of fine/coarse material.
Logging	•	Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support	•	Logging is conducted in detail at the drill site by the site geologist, who routinely records weathering, lithology,
		appropriate Mineral Resource estimation, mining studies		alteration, mineralisation, or any other relevant
		and metallurgical studies.		features. It is considered to be logged at a level of detail
	•	Whether logging is qualitative or quantitative in nature.		to support appropriate Mineral Resource estimation and
		Core (or costean, channel, etc) photography.		mining studies.
	•	The total length and percentage of the relevant	•	All holes were logged in the field by MTJV geologists
		intersections logged.		who have a long association and familiarity with the
				deposit.
			•	Logging is qualitative in nature.
			•	The entire length of each hole was logged in 1m
				intervals.
Sub-sampling 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	• •	All RC drill chips were split with a rotary splitter. The remaining sample was bagged and placed on the ground. Sample preparation followed industry standard practice of drying, coarse crushing to -6mm, before pulverising to
		appropriateness of the sample preparation technique.		90% passing 75 micron.
	•	Quality controlprocedures adoptedfor all sub-sampling	•	To meet QAQC requirements duplicates wereplaced at

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
		stages to maximise representivity of samples.		irregular intervals in the sample stream, usually one or
	•	Measures taken to ensure that the sampling is		two duplicates per drill hole (approximately every 20-
		representative of the in situ material collected, including		40m). For the RC drilling certified blanks (OREAS 24P)
		for instance results for field duplicate/second-half		were placed in the sample stream at the rate of 1 in 100,
		sampling.		at each hundredth sample. Additionally, two different
	•	Whether sample sizes are appropriate to the grain size of		certified standards were used in the sample stream
		the material being sampled.		(OREAS 72A and OREAS 162) at the rate of 2 standards
				per 100 samples. These were placed at the 25th and
				75th number of every hundred samples.
			•	The Co values in the blank samples were higher than the
				provided values however they are below 80 ppm;
				comparatively low compared to the estimated resource
				values and therefore within acceptable ranges for blank
				samples. Overall there were only a small number of
				outliers in the duplicates collected and therefore the
				duplicate results are also considered satisfactory.
			•	Material being sampled is generally fine grained, and a
				2-3kg sample from each metre is considered adequate.
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	•	Samples were crushed and pulverised, and analysed for Co, Ni, Mn, Zn, Mg, Al & Fe using a four acid digest with an ICP OES finish (method AD02-ICP) by Bureau Veritas’ Perth laboratory. These procedures are considered
		instruments, etc, the parameters used in determining the		appropriate for the elements and style of mineralisation.
		analysis including instrument make and model, reading		Analysis is considered total.
		times, calibrations factors applied and their derivation, etc.	•	No geophysical tools have been used.
	•	Nature of quality control procedures adopted (eg	•	The internal laboratory QAQC procedures included
		standards, blanks, duplicates, external laboratory checks)		analysing its own suite of internal standards and blanks
		and whether acceptable levels of accuracy (ie lack of bias)		within every sample batch and also adding sample
		and precision have been established.		duplicates.
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,	• •	Significant intersections are determined by company personnel and checked internally. A limited number of twinned RC holes and AC holes twinned by Sonic Core (SC) holes have been drilled. 5 of
		data verification, data storage (physical and electronic)		the 6 RC holes and the 3 AC holes are twins previous AC
		protocols.		holes. Analysis of paired data representing AC and SC
	•	Discuss any adjustment to assay data.		samples with proximity of approximately 5 m or less has
				given at least preliminary indications that some AC
				samples are yielding higher Co and Mn values than
				corresponding samples derived from SC. Population
				statistics however show the reverse and AC statistics are
				slightly lower grade on average than RC and SC.
			•	Individual sample numbers are generated and matched
				on site with down hole depths. Sample numbers are
				then used to match assays when received from the
				laboratory. Verification of data is managed and checked
				by company personnel with extensive experience. All
				data is stored electronically, with industry standard
				systems and backups.
			•	Data is not subject to any adjustments.
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.	• •	Collar locations were determined by hand held GPS and are accurate to approximately +/- 5m. The grid system used is AGD84; AMG Zone 51 to match a
	•	Specification of the grid system used.		previously established grid. A DTM and 2.5m spaced
	•	Quality and adequacy of topographic control.		topographic contours have been prepared from ortho-
				photomaps and hole RLs are measured from these. This
				topographic control is considered quite adequate for the
				current purposes.
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	•	All holes were sampled and assayed in 1m intervals and no other compositing has been applied during sample collection and assay laboratory preparation.
		appropriate for the Mineral Resource and Ore Reserve
		estimation procedure(s) and classifications applied.
	•	Whether sample compositing has been applied.
Orientation of data in relation	•	Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this	•	The mineralisation is mostly contained within a flat lying weathering blanket and vertical holes achieve unbiased

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
to geological		is known, considering the deposit type.		sampling in most cases.
structure	•	If the relationship between the drilling orientation and the	•	The mineralisation is mostly contained within a flat lying
		orientation of key mineralised structures is considered to		weathering blanket and vertical holes achieve unbiased
		have introduced a sampling bias, this should be assessed		sampling in most cases.
		and reported if material.
Sample security	•	The measures taken to ensure sample security.	•	Samples were either taken directly from the drill site to the laboratory in Kalgoorlie or delivered to a dedicated cartage contractor in Norseman by company employees
				and or contractors.
Audits or reviews	•	The results of any audits or reviews of sampling techniques and data.	•	No audits or reviews were carried out for this metallurgical drilling as it is not considered warranted at this stage.

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Mineral tenement and land tenure status	•	Type, reference name/number, location and ownership including agreements or material	•	The exploration results relate to the Mt Thirsty Project, located approximately 16km north west of Norseman, Western Australia. The tenements are owned 50:50 (Mt Thirsty Joint Venture, MTJV) by Conico Ltd (through its subsidiary Meteore Metals Pty Ltd) and Barra Resources Ltd. The project includes Retention Licence R63/4,
		issues with third parties		Exploration Licences E63/1267, and E63/1790 and Prospecting Licence P63/2045.
		such as joint ventures,		Mining Lease applications have been lodged over R63/4 and E63/1267 and a General
		partnerships, overriding		Purpose Lease application over E63/1790 and P63/2045. The exploration results
		royalties, native title		referred to in this announcement are located on R63/4.
		interests, historical sites,	•	A NSR royalty is payable to a third party on any production from R63/4. The
		wilderness or national park		tenements lie within the Ngadju native title claim (WC99/002), and agreements
		and environmental		between the claimants and the tenement holders are designed to protect Aboriginal
		settings.		heritage sites and facilitate access. There are no historical or wilderness sites or
	•	The security of the tenure		national parks or known environmental settings that affect the Mt Thirsty Project
		held at the time of		although the project area is located within the Great Western Woodlands.
		reporting along with any	•	Meteore/Barra have secured tenure over the project area and there are no known
		known impediments to		impediments to obtaining a licence to operate in the area.
		obtaining a licence to
		operate in the area.
Exploration done by other parties	•	Acknowledgment and appraisal of exploration by other parties.	•	The Mt Thirsty area was explored for nickel sulphide mineralisation in the late sixties and early seventies by Anaconda, Union Miniere, CRA, WMC/CNGC and others. Although no significant sulphide discoveries were made during that time, limonitic
				nickel/cobalt mineralisation was encountered but not followed up. In the 1990’s
				Resolute-Samantha discovered high grade cobalt mineralisation in the oxidised
				profile above an orthocumulate peridotite. This oxide mineralisation is the subject of
				this announcement.
Geology	•	Deposit type, geological setting and style of	•	The Mt Thirsty Cobalt deposit mineralisation has developed as a result of weathering of ultramafic (peridotite) rocks located at the southern end of the Archaean
		mineralisation.		Norseman - Wiluna greenstone belt. Most of the Co and some of the Ni
				mineralisation is associated with manganese oxides which have formed in the
				weathering profile.
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:	•	Test work during the scoping study was completed on a master composite made up from Reverse Circulation (RC) drill samples from six holes collected in November 2016 (refer ASX Quarterly Report for December Quarter 2016). The master composite was made up of a blend of approximately half upper saprolite domain (upper) and half lower saprolite domain (lower) at grades representative of the most important early years of the mine plan.
		o easting and northing	•	Over the entire Mineral Resource, the upper domain accounts for 13% and the lower
		of the drill hole collar		domain accounts for 87% of the available tonnes. As part of this PFS, composites for
		o elevation or RL		the upper and lower domains at grades representative of the early years in the mine
		(Reduced Level –		plan have been blended from these same RC samples from 2016.
		elevation above sea
		level in metres) of the	•	Additionally, three Air Core (AC) drill holes were drilled in August 2018 to collect fresh
		drill hole collar		samples for beneficiation test work. These samples were also blended into upper and
		o dip and azimuth of the		lower composites, although at grades representative of the overall Mineral Resource
		hole		averages for those domains.

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Criteria JORC Code explanation	Commentary	Commentary
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.	Hole ID	Date Drilled	Easting	Northing	RL (m)	Depth (m)	Composite Intervals (m)
	MTRC036	20/11/2016	372162	6447455	378	54	18-42
	MTRC037	19/11/2016	372244	6447455	376	30	13-30
	MTRC038	19/11/2016	372349	6447457	369	35	14-28
	MTRC039	20/11/2016	371956	6447000	382	40	14-34
	MTRC040	20/11/2016	372115	6447001	393	40	30-36
	MTRC041	20/11/2016	372295	6446999	381	35	23-32
	MTAC798	14/08/18	372300	6447251	377	30	3-5 8-10 16-26
	MTAC799	14/08/18	372121	6446846	392	60	35-48 54-56
	MTAC801	14/08/18	371754	6447056	375	35	23-34
	Table – Drill holes used i AGD84 Zone 51.		n the sample composites. All holes are
Data aggregation methods • In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg 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.	• Not applicable. • No equivalent values are used.
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 (eg ‘down hole length, true width not _known’). _	• As the mineralised envelope is generally flat lying and nearly all vertically; down hole width is mostly considered to be true width.						holes were drilled
Diagrams • Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should	• All diagrams contained in this document are generated from spatial data displayed in industry standard mining and GIS packages.

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Report for September Quarter 2019

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
		include, but not be limited
		to a plan view of drill hole
		collar locations and
		appropriate sectional
		views.
Balanced reporting	•	Where comprehensive reporting of all Exploration Results is not practicable,	•	Not applicable.
		representative reporting of
		both low and high grades
		and/or widths should be
		practiced to avoid
		misleading reporting of
		Exploration Results.
Other substantive exploration data	•	Other exploration data, if meaningful and material, should be reported	•	The variability leach composite sub-samples were approximately 850g on a dry solids basis mixed at 40% solids with synthetic hypersaline water. SO2was the reagent used and no acid was added. Leaches were conducted at 70 degrees C for 24 hours.
		including (but not limited	•	The bulk leach composite sub-samples were approximately 15-20kg on a dry solids
		to): geological		basis mixed at 40% solids with synthetic hypersaline water. SO2was the main reagent
		observations; geophysical		used and no acid was added. Leaches were conducted at temperatures ranging from
		survey results; geochemical		70-90 degrees C for 24-36 hours.
		survey results; bulk	•	Leach extraction results are reported as metal in residue vs feed.
		samples – size and method	•	Leach extraction results are reported prior to losses expected in solution
		of treatment; metallurgical		neutralisation, CCD washing and precipitation. For the scoping study, final product
		test results; bulk density,		recoveries of 73.0% for cobalt and 21.5% were calculated from leach extractions of
		groundwater, geotechnical		79.5% and 25.6% respectively. For the PFS, losses of less than 4% are targeted subject
		and rock characteristics;		to test-work outcomes.
		potential deleterious or
		contaminating substances.
Further work	•	The nature and scale of planned further work (eg	• •	The Mt Thirsty deposit is presently the subject of a PFS. Further test-work will include thickening and solid-liquid separation tests, tailing test-
		tests for lateral extensions		work as well as additional variability leaches.
		or depth extensions or	•	The PFS is nearing completion
		large-scale step-out
		drilling).
	•	Diagrams clearly
		highlighting the areas of
		possible extensions,
		including the main
		geological interpretations
		and future drilling areas,
		provided this information is
		not commercially sensitive.

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