ELEMENT 25 LIMITED — Capital/Financing Update 2019

Sep 26, 2019

ASX ANNOUNCEMENT 27 September 2019

Element 25 Completes the Sale of the Cummins Range Rare Earths Project

Element 25 Limited ( E25 or Company ) is pleased to advise that RareX Pty Ltd ( RareX ) has exercised its option to purchase the Cummins Range Rare Earths Project comprising Exploration Licence E80/5092 ( Cummins Range ). The sale of Cummins Range has now completed.

Pursuant to the option agreement announced 19 July 2019, RareX has paid $500,000 in cash and parent company Sagon Resources Limited ( Sagon ) ( ASX:SG1 ) has issued 13,338,261 ordinary shares at a deemed price of $0.0375 per share for total consideration of $1,000,000. The consideration shares are subject to a six month restriction agreement.

The sale agreement also includes a number of future payments as follows:

• Within twelve months of settlement of the acquisition, RareX/Saigon must pay $500,000 in cash and issue $500,000 in shares in Sagon or pay $1,000,000 in cash ( Deferred Consideration ).

• Within 36 months of settlement, and subject to the completion of a positive Bankable Feasibility Study ( BFS ) on the Cummins Range project, RareX/Sagon must pay or issue $1,000,000 in cash or Sagon shares or a combination thereof to a total value of $1,000,000 ( Further Deferred Consideration ).

• If a BFS is unable to be completed within 36 months of the date of settlement, the further Deferred Consideration is not payable and RareX will, in lieu, grant E25 a 1% Net Smelter Return Royalty on future production from the Cummins Range project capped at $1,000,000.

The Company is pleased with the outcome of this transaction. The additional cash will provide valuable working capital as the Company completes the Pre-Feasibility work at the 100% owned Butcherbird High Purity Manganese Project.

Note: all payments referred to in the transaction details are ex-GST.

Justin Brown

Managing Director

Company Snapshot

ASX Code: E25 Board of Directors: Shares on Issue: 92M Seamus Cornelius Chairman Share Price: $0.205 Justin Brown MD Market Capitalisation: $18.9M John Ribbons NED

Element 25 Limited is developing the world class Butcherbird manganese project in Western Australia to produce high purity manganese sulphate for lithium ion batteries and electrolytic manganese metal, powered with renewable energy.

Element 25 Limited P +61 8 6315 1400 E admin@e25.com.au element25.com.au

Level 2, 45 Richardson Street, West Perth, WA, 6005 PO Box 910 West Perth WA 6872 Australia

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