ELEMENT 25 LIMITED — Capital/Financing Update 2019

May 28, 2019

29 May 2019

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ASX / Media Release

UPDATE: MAGMATIC SECURES MAJOR COPPERNICKEL-COBALT PROJECT

As announced on 14 March 2018, Magmatic Resources Ltd (“Magmatic” or the “Company”) (ASX: MAG) entered into a binding agreement with Element 25 Limited (formerly, Montezuma Mining Company Limited) (“Element”) (ASX:E25) to acquire the Mt Venn copper-nickel-cobalt project near Laverton, WA comprising 100% of E38/2961. E38/2961 accounts for over 60% of the Mt Venn Intrusion currently being explored by Great Boulder Resources Limited (“GBR”).

Binding Agreement Update and Amendments

Magmatic confirms that it has met the following monetary terms of the binding agreement:

• payment of A$250,000 in cash to Element;

• issue of A$425,000 in ordinary fully paid Magmatic Shares.

Other key terms include:

• Magmatic must expend a minimum of A$500,000 on exploration at E38/2961 within the first 18 months following acquisition. Should Magmatic not reach the required expenditure, Magmatic can elect to pay to Montezuma the difference between actual incurred expenditure and A$500,000 or Montezuma will regain tenure at E38/2961;

• Should Magmatic define a JORC 2012 Mineral Resource of 20Mt @ >= 1% CuEq at E38/2961, Magmatic will pay to Montezuma A$350,000 in cash and A$350,000 in ordinary fully paid MAG shares;

• Should Magmatic make a Decision to Mine at E38/2961, Magmatic will pay to Montezuma A$350,000 in cash and A$350,000 in ordinary fully paid MAG shares;

• Montezuma will retain a 2.0% Net Smelter Royalty (“NSR”) on production at E38/2961. Magmatic has been granted a buyback option over the NSR which can be exercised at any time in return for an A$5,000,000 cash payment to Montezuma.

Magmatic and Element have now agreed to amend the terms of the binding agreement to waive the requirement for Magmatic to expend a minimum of A$500,000 on exploration at E38/2961 (“Minimum Expenditure”) in consideration for the issue of 2,000,000 unlisted options exercisable at $0.03 on or before five years from the issue date as consideration for waiving the Minimum Expenditure.

MAG has also been granted new tenement license E38/3351, abutting our Mt Venn project to the North, adding to its Laverton/Yamarna regional project portfolio:

• Yamarna Gold Project - 20km from 6Moz Gruyere mine (under construction):

• ➢ 1 granted tenement

• ➢ 2 exploration tenements under application

• Mt Venn copper-nickel-cobalt project

• ➢ 2 granted tenements (1 newly granted)

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E : info@magmaticresources.com

1

MAGMATIC RESOURCES LTD magmaticresources .com

T: +61 8 9322 6009

Head Office: Suite 8, 1297 Hay Street West Perth WA 6005 ABN 32 615 598 322

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The Company is not aware of any other new information or data that materially affects the information included in the previous market announcement (14 March 2018).

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About Magmatic’s Project Portfolio

Magmatic Resources (MAG) is an Australian exploration company with four gold, copper and other base metals projects in the East Lachlan, New South Wales. Magmatic acquired two Western Australian projects in 2018: Yamarna (gold) and Mt Venn (copper-nickel-cobalt).

New South Wales – East Lachlan

The Company has four 100% owned projects – Myall, Moorefield, Wellington North and Parkes (joint venture with JOGMEC) – comprising eight tenements (1049km[2] ) in the East Lachlan Fold Belt in central NSW. This province is host to major gold and copper mining operations within the Ordovician Macquarie Arc, with significant metal endowments[1] such as Newcrest’s Cadia Valley (48.7Moz Au and 6.5Mt Cu), Evolution’s Cowal (8.35Moz Au) and China Moly – Sumitomo’s Northparkes (3.8Moz Au and 3.4Mt Cu). Other mines and advanced projects in the region include Regis’ McPhillamys (2.2Moz Au), Sandfire’s Temora (2.1Moz Au and 0.8Mt Cu), and Alkane’s Tomingley (0.8Moz Au).

The NSW portfolio was acquired from Gold Fields (world’s 7th largest gold miner) in 2016 and is prospective for porphyry gold-copper, epithermal and orogenic gold deposits and skarn and VHMS base metals ± gold deposits. Gold Fields spent more than $13.5m exploring the projects and identified more than 40 prospects and retains a 20% shareholding in Magmatic. The Company is focused on advancing priority, near surface gold prospects, while joint venturing its larger gold-copper porphyry projects.

Western Australia – Yamarna and Mt Venn

Magmatic’s Yamarna gold project is in the central part of the Yamarna greenstone belt and ~15km from Gold Road Resources/Gold Field’s ~6Moz[2] Au Gruyere mine under development. Gold Road announced a $23M (163,500m) 2018 greenfield exploration budget on its nearby Yamarna tenements.

The Company purchased the Mt Venn copper-nickel-cobalt project in March 2018 (ASX: MAG 11/04/2018), where exploration licence E38/2961 covers 60% of the Mt Venn Igneous Complex and is immediately along strike from the recent copper-nickel-cobalt sulphide discovery of the same name by Great Boulder Resources.

Please direct all enquiries to:

David Richardson Managing Director Phone: +61 8 9322 6009 Email: info@magmaticresources.com

1 Metal endowment from: Phillips, G N (Ed), 2017. Australian Ore Deposits (The Australasian Institute of Mining and Metallurgy: Melbourne)

2 See GOR ASX release 27/03/2018

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3

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

MAGMATIC RESOURCES LTD

ABN

32 615 598 322

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	Unlisted options exercisable at 3c on or before 29 May 2024
	2,000,000 unlisted options exercisable at 3c ($0.03) on or before 29 May 2024
	Unlisted options exercisable at 3c on or before 29 May 2024

• See chapter 19 for defined terms.

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4 Do the+securities rank equally in all respects from the+issue date with an existing+class of quoted +securities? If the additional+securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the+securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of+securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A	Yes
	N/A
	Consideration for deleting the $500,000 “Minimum Expenditure” clause of the Sale Agreement dated 10 March 2018
	No
	Not applicable
	Not applicable
	Not applicable

• See chapter 19 for defined terms.

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	6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting)	Not applicable
	6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. 8 Number and +class of all +securities quoted on ASX (_including_the +securities in section 2 if applicable)
		Not applicable
		Not applicable
		Not applicable
		7.1 15,586,385 7.1A 11,724,256
		29 May 2019
		Number	+Class
		117,242,568 17,230,613 26,859,141	Fully paid ordinary shares Options exercisable at 30 cents and expiring 17 May 2020 Options exercisable at $0.10 on or before 30 August 2021

• See chapter 19 for defined terms.

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9 Number and +class of all +securities not quoted on ASX (_including_the +securities in section 2 if applicable) 7. 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number	+Class
	8,000,000 750,000 2,500,000 2,000,000	Class B performance shares* Unlisted options exercisable at 30 cents and expiring 17 May 2020 Unlisted options exercisable at a price which is the greater of $0.20 or a 5% discount to the 20 day volume weighted average price of shares on ASX and expiring on 11 May 2020 Unlisted options exercisable at 3 cents and expiring 29 May 2024
	*Conversion ratio on achieving performance terms ratio 1:1

Part 2 - Pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or nonrenounceable? 13 Ratio in which the[+] securities will be offered 14 +Class of +securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements?

• See chapter 19 for defined terms.

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17	Policy for deciding entitlements
	in relation to fractions
18	Names of countries in which the
	entity has security holders who
	will not be sent new offer
	documents
	Note: Security holders must be told how their
	entitlements are to be dealt with.
	Cross reference: rule 7.7.
19	Closing date for receipt of
	acceptances or renunciations

• See chapter 19 for defined terms.

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20	Names of any underwriters
21	Amount of any underwriting fee
	or commission
22	Names of any brokers to the issue
23	Fee or commission payable to the
	broker to the issue
24	Amount of any handling fee
	payable to brokers who lodge
	acceptances or renunciations on
	behalf of security holders
25	If the issue is contingent on
	security holders’ approval, the
	date of the meeting
26	Date entitlement and acceptance
	form and offer documents will be
	sent to persons entitled
27	If the entity has issued options,
	and the terms entitle option
	holders to participate on exercise,
	the date on which notices will be
	sent to option holders
28	Date rights trading will begin (if
	applicable)
29	Date rights trading will end (if
	applicable)
30	How do security holders sell their
	entitlements_in full_through a
	broker?
31	How do security holders sell_part_
	of their entitlements through a
	broker and accept for the
	balance?

• See chapter 19 for defined terms.

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• 32 How do security holders dispose of their entitlements (except by sale through a broker)?

• 33 +Issue date

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of[+] securities ( tick one )

• (a) +Securities described in Part 1

• (b)[All other ][+][securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories

• 1 - 1,000

1,001 - 5,000

5,001 - 10,000 10,001 - 100,000 100,001 and over

37 A copy of any trust deed for the additional[+] securities

Entities that have ticked box 34(b)

38 Number of[+] securities for which Not Applicable +quotation is sought

• See chapter 19 for defined terms.

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39 +Class of +securities for which Not Applicable quotation is sought 40 Do the[+] securities rank equally in Not Applicable all respects from the[+] issue date with an existing[+] class of quoted +securities? If the additional[+] securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation Not Applicable now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another[+] security, clearly identify that other[+] security) Number +Class 42 Number and +class of all Not Applicable Not Applicable +securities quoted on ASX ( including the[+] securities in clause 38)

• See chapter 19 for defined terms.

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Quotation agreement

1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted +quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

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Sign here: ............................................................ Date: 29 May 2019 (Company secretary) Print name: Ildiko Wowesny

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• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

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Insert number of fully paid [+] ordinary 117,242,568
securities on issue 12 months before the
+ issue date or date of agreement to issue
Add the following:
• Number of fully paid [+] ordinary
securities issued in that 12 month
period under an exception in rule 7.2
• Number of fully paid [+] ordinary
securities issued in that 12 month
period with shareholder approval
• Number of partly paid [+] ordinary
securities that became fully paid in that
12 month period
Note:
• Include only ordinary securities here –
other classes of equity securities
cannot be added
• Include here (if applicable) the
securities the subject of the Appendix
3B to which this form is annexed
• It may be useful to set out issues of
securities on different dates as
separate line items
Subtract the number of fully paid
+ ordinary securities cancelled during that
12 month period
“A” 117,242,568
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• See chapter 19 for defined terms.

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Step 2: Calculate 15% of “A”

	Step 2: Calculate 15% of “A”	Step 2: Calculate 15% of “A”
	“B”	0.15 [Note: this value cannot be changed]
	Multiply“A” by 0.15	17,586,385
	Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used
	Insertnumber of+equity securities issued or agreed to be issued in that 12 month period_not counting_those issued: • Under an exception in rule 7.2 • Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4 Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed • It may be useful to set out issues of securities on different dates as separate line items	2,000,000 options (29 May 2019)
	“C”	2,000,000
	Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
	“A” x 0.15 Note: number must be same as shown in Step 2	17,586,385
	Subtract“C” Note: number must be same as shown in Step 3	2,000,000
	Total[“A” x 0.15] – “C”	15,586,385 [Note: this is the remaining placement capacity under rule 7.1]

• See chapter 19 for defined terms.

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Part 2

Rule 7.1A – Additional placement capacity for eligible entities

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated “A” 117,242,568 Note: number must be same as shown in Step 1 of Part 1 Step 2: Calculate 10% of “A” “D” 0.10 Note: this value cannot be changed Multiply “A” by 0.10 11,724,256

Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used

Insert number of[+] equity securities issued Not Applicable or agreed to be issued in that 12 month period under rule 7.1A Notes:

• This applies to equity securities – not just ordinary securities

• • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed

• • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained

• • It may be useful to set out issues of securities on different dates as separate line items

• “E” N/A

• See chapter 19 for defined terms.

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Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	11,724,256
Subtract“E” Note: number must be same as shown in Step 3	Not Applicable
Total[“A” x 0.10] – “E”	11,724,256 Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

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