ELEMENT 25 LIMITED — Capital/Financing Update 2020

Jul 1, 2020

ASX ANNOUNCEMENT

2 July 2020

Potential High Grade Manganese Concentrate Zone Identified at Butcherbird

Element 25 Limited ( E25 or Company ) ( ASX:E25 ) is pleased to announce that sub-sampling of diamond core from BBDD016 drilled into the Coodamudgi manganese resource at the Company’s 100% owned Butcherbird Manganese Project ( Project ) has returned high grade manganese values of up to 42.3%Mn from surface with low impurity levels.

Importantly the Coodamudgi resource is located entirely within granted mining lease M52/1074 meaning it can be quickly integrated into the mine plan once resource drilling is completed and metallurgy is confirmed.

The data indicates that the Coodamudgi resource, which is located adjacent to the Yanneri Ridge resource that is the focus of the recently released Pre-Feasibility Study ( PFS ) has the potential to deliver a concentrate grade which is significantly higher than the grades used in the PFS assumptions.

The sub-sampling methodology utilised is designed to emulate full scale processing via the proposed beneficiation flowsheet for the Project. Further test work is planned to confirm these exciting results. Higher concentrate grades deliver improved prices per tonne of concentrate shipped and can have a significantly positive impact on Project revenues.

E25 Managing Director Mr Justin Brown commented, “ The grades achieved in the subsampling exercise at Coodamudgi are indicative of the potential to achieve a product grade in excess of the grades published in the PFS of 33%Mn. If this can be confirmed under full scale test work, this will have a positive impact on what are already excellent Project economics. ”

Company Snapshot

ASX Code: E25 Board of Directors: Shares on Issue: 98M Seamus Cornelius Chairman Share Price: $0.485 Justin Brown MD Market Capitalisation: $47.5M John Ribbons NED

Element 25 Limited is developing the world class Butcherbird Manganese Project in Western Australia to produce high quality manganese concentrate and high purity manganese products for traditional and new energy markets.

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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Page 1

2 July 2020

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Figure 1: Granted mining lease M52/1074 showing resource categories and location of BBDD0016 relative to current mine plan areas.

The manganese mineralisation at Butcherbird is characterised by interlayered bands of clay, which contain virtually no manganese and high grade manganese layers which can be beneficiated via the process flowsheet outlined in the Company’s recently released PFS[1] .

Selective sampling of the manganese layers is expected to emulate the potential concentrate grade that could be achieved via the proposed processing flowsheet. The results returned from the sub-sampling of the top 6m of the core from BBDD016 are tabulated in table 1 below. The average grade is 37.6% Mn.

Table 1: Subsampling results for manganese bands in diamond drillhole BBDD016.

Sample ID	Mn(%)	Fe(%)	P(%)	SiO2	Al(%)	LOI (%)
BBDD016 0-1 m	42.3	4.78	0.04	15.57	2.17	10.99
BBDD016 1-2 m	41.4	5.67	0.04	16.25	2.20	11.15
BBDD016 2-3 m	38.2	7.53	0.04	17.62	2.33	10.75
BBDD016 3-4 m	33.8	10.6	0.08	18.52	2.67	10.54
BBDD016 4-5 m	38.3	6.58	0.10	17.90	2.36	11.07
BBDD016 5-6 m	31.7	14.5	0.13	16.81	2.55	9.70

1 Reference: Company ASX release dated 19 May 2020

2 July 2020

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Drillhole BBDD016 was completed as part of a metallurgical programme completed in 2013[2] , however it was never sampled. The outstanding economics returned from the PFS have highlighted the opportunity to identify material within the mining lease area which may yield higher grade concentrates and further enhance the robust economics than the base case published in the PFS. Based on this recent test work, Coodamudgi may represent such an opportunity and further work is being planned to expand on these early results.

About the Butcherbird Manganese Project

The Butcherbird Manganese Project is a world class manganese resource with current JORC resources in excess of 263 Mt of manganese ore[3] . The Company has recently completed a Pre-Feasibility Study with respect to developing the deposit to produce manganese concentrate for export to generate early cashflow with a modest capital requirement[4] . The outstanding economics and low capital hurdle of less than A$15 million will allow the Company to develop the project in a relatively short timeframe.

This is envisaged as the first stage of a staged ramp up for the project and has the advantage of potentially providing early cashflow to strengthen the Company’s balance sheet and assist in funding of the larger high purity manganese production hub which is the subject of a parallel, complimentary work stream.

The Project straddles the Great Northern Highway and the Goldfields Gas Pipeline providing turnkey logistics and energy solutions. The Company is also intending to integrate renewable energy into the power solution to minimise the carbon intensity of the Project as well as reducing energy costs. A cleaner, lower carbon flowsheet and high penetration renewable energy will place Butcherbird at the forefront of sustainable metal production.

Mineral Resources

Category	Tonnes (Mt)	Mn (%)	Si (%)	Fe (%)	Al (%)
Measured	16	11.6	20.6	11.7	5.7
Indicated	41	10.0	20.9	11.0	5.8
Inferred	206	9.8	20.8	11.4	5.9
Total	263	10.0	20.8	11.4	5.9

Notes:

• Reported at a 7% Mn cut-off for the Measured and Indicated categories and an 8% Mn cut-off for the Inferred categories. • All figures rounded to reflect the appropriate level of confidence (apparent differences may occur due to rounding)

2 Company’s ASX release dated 30 January 2014.

3 Reference: Company ASX release dated 17 April 2019.

4 Reference: Company ASX release dated 19 May 2020

2 July 2020

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Mining Reserve

Based on the results of the Pre-Feasibility Study completed in May 2020, E25 has published a Maiden Ore Reserve for the Project of 50.55Mt in the Proved and Probable categories[5] .

Classification	Tonnes (Mt)	Grade (Mn%)	Contained Mn (Mt)	Recovered Mn (Mt)
Proved	14.4	11.5	1.65	1.35
Probable	36.2	9.8	3.56	2.92
Total	50.6	10.3	5.21	4.27

Justin Brown

Managing Director

Company information, ASX announcements, investor presentations, corporate videos and other investor material in the Company’s projects can be viewed at: http://www.element25.com.au.

Competent Persons Statement

The company confirms that in the case of estimates of Mineral Resource or Ore Reserves, all material assumptions and technical parameters underpinning the estimates in the market announcements dated 17 April 2019 and 19 May 2020 continue to apply and have not materially changed. The company confirms that the form and context in which the competent person’s findings are presented has not been materially modified from the original market announcements.

The information in this report that relates to Exploration Results and Exploration Targets is based on information compiled by Mr Justin Brown who is a member of the Australasian Institute of Mining and Metallurgy. At the time that the Exploration Results and Exploration Targets were compiled, Mr Brown was an employee of Element 25 Limited. Mr Brown is a geologist and 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 in the 2012 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Brown consents to the inclusion of this information in the form and context in which it appears in this report.

This announcement is authorised for market release by Element 25 Limited’s Board of Directors.

5 Reference: Element 25 Limited Reserve Statement lodged with ASX 19 May 2020.

Appendix 1 - JORC Code, 2012 Edition – Table 1 – Butcherbird Project Channel Manganese Drilling

Section 1 Sampling Techniques and Data

Criteria	JORC Code explanation	JORC Code explanation	Commentary	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 investigation, such	• •	Samples were selected for analysis based on visual logs of manganese content. Manganese enriched layers were visually subsampled for assay.
		as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not
		be taken as limiting the broad meaning of sampling.
	•	Include reference to measures taken to ensure sample representivity and the appropriate
		calibration of any 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 coarsegold that has inherent sampling problems.
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 tails,	•	HQ triple tube diamond drilling.
		face-samplingbit or other type,whether core is oriented and if so,bywhat method,etc).
Drill sample recovery	• •	Method of recording and assessing core and chip sample recoveries and results assessed. Measures taken to maximise sample recovery and ensure representative nature of the	•	Core recoveries were calculated and recorded using industry standard techniques.
		samples.
	•	Whether a relationship exists between sample recovery and grade and whether sample bias
		mayhave occurred due topreferential loss/gain of fine/coarse material.
Logging	•	Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and	•	All samples have been logged to a level of detail to support the interpretation of potentially economic manganese plant feed and to justify resource domaining.
		metallurgical studies.	•	Qualitative: Lithology, alteration, mineralisation.
	•	Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc)	•	The entire length of the hole is geologically logged.
		photography.
	•	The total length andpercentage of the relevant intersections logged.
Sub-sampling	• •	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.	•	The core has not been cut. Samples were taken from separate layers downhole to emulate the outcome of the proposed beneficiation process.
techniques and	•	For all sample types, the nature, quality and appropriateness of the sample preparation
sample preparation	•	technique. Quality control procedures adopted for all sub-sampling stages to maximise representivity of
		samples.
	•	Measures taken to ensure that the sampling is representative of the in situ material collected,
		includingfor instance results for field duplicate/second-half sampling.

Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
	•	Whether sample sizes are appropriate to thegrain size of the material beingsampled.
Quality of assay data	•	The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.	•	Samples were sent to a certified laboratory for standard XRF assay processing.
and laboratory tests	•	For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in
		determining the analysis including instrument make and model, reading times, calibrations
		factors applied and their derivation, etc.
	•	Nature of quality control procedures adopted (eg standards, blanks, duplicates, external
		laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision
		have been established.
Verification of	•	The verification of significant intersections by either independent or alternative company personnel.	•	N/A
sampling and assaying	•	The use of twinned holes.
	•	Documentation of primary data, data entry procedures, data verification, data storage
		(physical and electronic) protocols.
Location of data	•	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.	•	All collar coordinates were collected using handheld GPS in MGA 94 – Zone 51.
points	•	Specification of the grid system used.
	•	Quality and adequacy of topographic control.
Data spacing and	• •	Data spacing for reporting of Exploration Results. Whether the data spacing and distribution is sufficient to establish the degree of geological	•	The drilling was not completed for the purposes of calculating a mineral resource.
distribution		and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation
		procedure(s) and classifications applied.
	•	Whether sample compositinghas been applied.
Orientation of data in	•	Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.	• •	All drill holes are drilled vertically as the stratigraphy is generally sub-horizontal. There is no known sample biasing.
relation to geological	•	If the relationship between the drilling orientation and the orientation of key mineralised
structure		structures is considered to have introduced a sampling bias, this should be assessed and reported if material.
Sample security	•	The measures taken to ensure sample security.	•	The samples were transported to a Perth laboratory via a reputable transport company.
Audits or reviews	•	The results of any audits or reviews of sampling techniques and data.	•	The data and sampling techniques are reviewed internally.

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	•	Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title	•	The Butcherbird Project consists of granted exploration license E52/2350 and Mining Lease M52/1074.
land tenure status		interests, historical sites, wilderness or national park and environmental settings.	•	The tenure is 100% owned by Element 25 Ltd.
	•	The security of the tenure held at the time of reporting along with any known impediments
		to obtaininga licence to operate in the area.
Exploration done by	•	Acknowledgment and appraisal of exploration by other parties.	•	The historical exploration data has been collected by Element 25 Limited and has been reported to high standards.
other parties			•	The methods of exploration and techniques used are considered appropriate for the deposit
				types sought (Mn)
Geology	•	Deposit type, geological setting and style of mineralisation.	•	The geological target is supergene enriched zones of a regional manganiferous subtidal marine shale.
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:		• Drillhole BBDD016 is located at 772691E 7298698N. It was drilled vertically from surface. Total depth was 32.1m. The full details were originally reported in the Company’s ASX
		o easting and northing of the drill hole collar		release dated 30 January 2014.
		o elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole
		collar
		o dip and azimuth of the hole
		o down hole length and interception depth
		o hole length.
Data aggregation	•	In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually	•	NA
methods		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 anyreportingof metal equivalent values should be clearlystated.

Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Relationship between	•	If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.	•	The mineralisation is flat lying, the drilling is vertical and the intersections are true width.
mineralisation widths	•	If it is not known and only the down hole lengths are reported, there should be a clear
and intercept lengths		statement to this effect (eg ‘down hole length, true width not known’).
Diagrams	•	Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be	•	NA
		limited to aplan view of drill hole collar locations and appropriate sectional views.
Balanced reporting	•	Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid	•	NA
		misleadingreportingof Exploration Results.
Other substantive	•	Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results;	•	NA
exploration data		bulk samples – size and method of treatment; metallurgical test results; bulk density,
		groundwater, geotechnical and rock characteristics; potential deleterious or contaminating
		substances.
Further work	•	The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling).	•	The next phase of exploration work is still in the planning stages.
	•	Diagrams clearly highlighting the areas of possible extensions, including the main geological
		interpretations and future drilling areas, provided this information is not commercially
		sensitive.