ELEMENT 25 LIMITED — Regulatory Filings 2017

Jul 30, 2017

ABOUT MONTEZUMA MINING

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31 JULY 2017

TEST WORK ON HYDROMETALLURGICAL PROCESSING OF BUTCHERBIRD ORE EXCEEDS EXPECTATIONS

• Ø CSIRO has completed Stage I (leach optimisation stage) of hydrometallurgical processing studies to produce high value battery materials from the Butcherbird Manganese Deposit (100% MZM).

• Ø Final leaching results produce a Pregnant Leach Solution (“PLS”) with >91% purity and >95% Mn extraction in a rapid single stage leach under benign conditions;

• atmospheric pressure and ambient temperature.

• leaching rates unaffected by grind size up to 1mm. Coarser particle size tests pending.

• leach kinetics are very rapid with optimal residence times between thirty and sixty minutes.

• reaction is exothermic, producing heat energy for use in purification processing stage - no additional energy required.

Listed in 2006, Montezuma Mining Company Ltd (ASX: MZM) is a diversified explorer primarily focused on gold and manganese. The Company’s primary objective is to achieve returns for shareholders through selected strategic acquisitions and targeted exploration.

Montezuma has 100% interests in the Yamarna Gold Project in the Yamarna Greenstone Belt, the Holleton Gold Project in the Wheat Belt region and the Butcherbird Manganese/Copper Project in the Murchison region, all located in Western Australia.

MARKET DATA

ASX code: MZM Share price: $0.135 Shares on issue: 83.5M Market capitalisation: $11.3M Cash (at 30 June): ~$4.2M Listed Investments: ~$6.4M

BOARD AND MANAGEMENT

Chairman Seamus Cornelius Executive Director Justin Brown Non-Executive Director John Ribbons Exploration Manager Dave O’Neill

• Ø Discussions in progress to define scope of work for Stage II studies on PLS purification and production of a final value added product.

• Ø Market research has identified a number of potential product streams which should add significant value to the Butcherbird ore including:

• Electrolytic Manganese Dioxide (“EMD”).

• Chemical Manganese Dioxide (“CMM”).

• Electrolytic Manganese Metal (“EMM”)

• Manganese Sulphate as a fertilizer and feed additive.

• Ø Butcherbird is Australia’s largest onshore manganese resource at >170 million tonnes of manganiferous ore[4] .

• Ø Lithium-Ion battery[1] cathodes contain up to 60% manganese, which is ~5 times the contained value and ~15 times the amount of lithium[2,3] .

Montezuma Mining Company Ltd (“Montezuma” or “Company”) is pleased

to announce that the Commonwealth Scientific and Industrial Research Organisation (“CSIRO”) Process Science and Technology Group has successfully completed Stage I of the research and development studies into the production of high purity manganese products from ores sourced from the Company’s 100% owned, infrastructure endowed Butcherbird Project in Western Australia. Results exceeded expectations.

1 http://www.visualcapitalist.com/manganese-powering-the-next-generation-of-lithium-ion-batteries/

2 http://batteryuniversity.com/learn/article/types_of_lithium_ion

3 https://www.metalary.com/lithium-price/

Company information, ASX announcements, investor presentations, corporate videos and other investor material on the Company’s projects can be viewed at www.montezuma.com.au

ABOUT THE BUTCHERBIRD PROJECT

The Butcherbird Manganese Deposit is Australia’s largest onshore manganese resource[4] comprising large tonnages of near surface manganese oxide ore in seven deposits.

The Project also has some excellent infrastructure advantages with a gas pipeline and main bitumen highway passing directly adjacent to and through the mineralised envelope.

The mineralisation occurs as supergene enrichment of a regional scale basal manganese shale which underlies much of the Project area. The shale beds are gently folded and where the folds approach the surface topography, supergene processes have significantly upgraded the manganese content to form a potential feedstock for further upstream processing.

BENEFICIATION POTENTIAL

The Company discovered the Butcherbird deposits during 2010-2011, and has subsequently undertaken several rounds of metallurgical test work which have shown that a high silica concentrate with approximately 33% contained manganese and low deleterious elements can be reliably produced through relatively simple processing methods[5] . This medium grade concentrate is suitable for use in the production of silico manganese alloys, a major manganese feedstock for use in steel making.

Building on further mineralogical characterisation work at CSIRO, a range of selected samples and beneficiation strategies were tested during the recent studies. Despite a range of processing streams, similar results were achieved to the historical work, and reconfirms the limited potential to further upgrade the ore. However, this concentrate has been used as the initial feed for the EMD production process test work, with highly encouraging results.

EMD TEST WORK SUCCESS

Early test work involving a range of hydrometallurgical options, including impurity leaching to generate a concentrate, and direct leaching of manganese, showed very encouraging results. In

Classification	Inferred Resource	Inferred Resource
Cut-off	10% Mn
Deposit	Tonnes (Mt)	Mn (%)
Bindi Bindi Hill	8.75	11.09
Budgie Hills	1.03	10.82
Cadgies Flats	0.25	11.08
Coodamudgi	12.9	11.48
Illgararie Ridge	17.0	10.71
Mundawindi	14.2	12.23
Richies Find	16.1	11.56
SUBTOTAL	70.2	11.4
Yanneri Ridge	48.8	11.8
GLOBAL TOTAL	119.0	11.6

Table 1. Inferred Mineral Resource Estimates at the Butcherbird Manganese Project are reported at a 10% Mn cut.

Classification	Inferred Resource	Inferred Resource
Cut-off	8-10% Mn
Deposit	Tonnes (Mt)	Mn (%)
Bindi Bindi Hill	5.7	9.2
Budgie Hills	3.5	8.9
Cadgies Flats	0.2	9.1
Coodamudgi	3.6	9.5
Illgararie Ridge	18.5	9.2
Mundawindi	2.1	9.4
Richies Find	6.6	9.4
SUBTOTAL	40.1	9.3
Yanneri Ridge	15.8	9.4
GLOBAL TOTAL	55.9	9.3

Table 2. Inferred Mineral Resource Estimates at the Butcherbird Manganese Project are reported at 8-10% Mn.

particular, the first tests using selected reductive leaching, designed by CSIRO scientists, yielded excellent manganese leaching results, rapid leach kinetics (>95% Mn extraction in 30 minutes ), and impressive selectivity over key impurities[6] . Subsequent work focussed on optimising the leach protocols and the confirmed that it is possible to achieve these results at atmospheric pressure and ambient temperature at coarse grind sizes without the need to add sulphuric acid for pH control.

4 Montezuma Mining Company Ltd ASX release dated 7 December 2012

5 Montezuma Mining Company Ltd ASX release dated 27 December 2014 6 Montezuma Mining Company Ltd ASX release dated 6 June 2017

ABOUT BATTERY GRADE MANGANESE

Industry observers expect the global electrolytic manganese dioxide market to reach USD 635.7 million by 2022 with a projected compound annual growth rate of 4.9% from 2015 to 2022. [ 7]

Growth in demand from the battery manufacturing industry is expected to drive projected demand curves as technological advancements in wind and solar power generation and the need for associated grid electrical storage systems expands.

Battery production is the leading EMD consumer with market share estimated to exceed 90% of global consumption. This demand is expected to continue to grow due to the current and expected future growth in the global electric vehicle industry, which in turn has a strong impact on battery demand. Manganese in the

form of EMD is a key ingredient in several types of widely used battery technologies including Li-ion , alkaline and zinc-carbon , and the next generation lithiated manganese dioxide batteries, with cathodes comprising over 60% Mn compared to approximately 4% lithium .

In addition to the potential production of EMD, concurrent market research has also identified a range of other products with high value in use which may be considered for the processing of Butcherbird ores. These include:

• Electrolytic Manganese Dioxide (“EMD”).

• Chemical Manganese Dioxide (“CMM”).

• Electrolytic Manganese Metal (“EMM”)

• Manganese Sulphate as a fertilizer and feed additive.

On a theoretical chemistry basis, all of these end products should be able to be produced from the PLS that resulted from the Stage I test work.

The test results have exceeded expectations and the Company has initiated discussions with CSIRO to commence Stage II investigations focussed on potential purification options for the PLS and subsequent production of end products for marketing and commercial studies.

Table 3: Assay of typical PLS sample (500 µm, 40% pulp density, controlled pH ~1.2).

Time	Concentration(mg/L)	Concentration(mg/L)
(min)	Mn	Fe	K	Al	Ni	Co	Cu	Zn	Cd	Cr
0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
5	74646	1560	3517	1629	33	58	27	45	<0.2	8
15	117866	2455	5103	2431	60	90	41	65	<0.2	11
30	136891	2898	5911	2732	86	101	41	82	<0.4	12

Time	Concentration(mg/L)	Concentration(mg/L)	Concentration(mg/L)
(min)	Na	Mg	Li	Pb	As	Ba	Mo	Se	Ca
0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
5	664	286	6	7	5	1	<0.2	17	673
15	964	379	13	10	5	<0.2	<0.2	22	458
30	1099	394	18	10	7	<0.2	<0.4	27	949

7 http://www.grandviewresearch.com/press-release/global-electrolytic-manganese-dioxide-market

Table 4: Assay of typical PLS sample (500 µm, 40% pulp density, no pH control).

Time	Concentration(mg/L)	Concentration(mg/L)
(min)	Mn	Fe	K	Al	Ni	Co	Cu	Zn	Cd	Cr
0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
5	55039	499	2690	482	21	43	11	33	<0.2	3
15	77064	1077	3859	1107	33	64	22	47	<0.2	4
30	112202	1819	5556	2062	33	55	22	42	<0.2	6
60	139705	2385	5990	2473	61	103	38	81	<0.4	8

Time	Concentration(mg/L)	Concentration(mg/L)	Concentration(mg/L)
(min)	Na	Mg	Li	Pb	As	Ba	Mo	Se	Ca
0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
5	501	228	2	6	2	<0.2	<0.2	13	523
15	711	284	4	7	6	8	<0.2	17	656
30	557	210	8	6	4	<0.2	<0.2	14	552
60	1124	401	17	14	8	2	<0.4	26	890

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Figure 1: Butcherbird Manganese Project location plan including resource outlines.

FOR MORE INFORMATION…

Justin Brown

Executive Director

Phone: +61 8 6315 1400

Email: jbrown@montezuma.com.au Company information, ASX announcements, investor presentations, corporate videos and other investor material on the Company’s projects can be viewed at http://www.montezuma.com.au.

The information in this report that relates to Exploration Results, Mineral Resources and Mineral Reserves 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, Mineral Resources and Mineral Reserves were compiled, Mr Brown was an employee of Montezuma Mining Company Ltd. 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

Please note with regard to exploration targets, the potential quantity and grade is conceptual in nature, that there has been insufficient exploration to define a Mineral Resource and that it is uncertain if further exploration will result in the determination of a Mineral Resource.

The information in the announcement that relates to Mineral Resources for the Butcherbird Project is extracted from ASX announcement of 7 December 2012. The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements 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 have not been materially modified from the original market announcement. This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.

JORC Table 1

JORC Code, 2012 Edition – Table 1 – Butcherbird Project Hydrometallurgical Test Work

Section 1 Sampling Techniques and Data

Criteria	JORC Code explanation	Commentary
Sampling	• Nature and quality of sampling (eg cut channels, random chips, or	•The samples for metallurgical test work were selected from
techniques	specific specialised industry standard measurement tools	contiguous lengths of core that were considered to be typical in
	appropriate to the minerals under investigation, such as down hole	character to the bulk of the ore zones at Yanneri Ridge.
	gamma sondes, or handheld XRF instruments, etc). These	•Whole core was used to maximise the volume of sample.
	examples should not be taken as limiting the broad meaning of	•The drill core was combined into two bulk samples.
	sampling.	•The bulk test work samples were then beneficiated using a 950mm
	• Include reference to measures taken to ensure sample	rotary drum scrubber.
	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 coarse gold that has inherent
	sampling problems. Unusual commodities or mineralisation types
	(eg submarine nodules) may warrant disclosure of detailed
	information.
Drilling	• Drill type (eg core, reverse circulation, open-hole hammer, rotary	•A Diamond Drill Rig was used for the metallurgical program with
techniques	air blast, auger, Bangka, sonic, etc) and details (eg core diameter,	PQ sized core (85mm diameter).
	triple or standard tube, depth of diamond tails, face-sampling bit or	•9 holes were drilled into key areas of the Yanneri Ridge orebody
	other type, whether core is oriented and if so, by what method,	to twin historical RC drill holes.
	_etc). _
Drill sample	• Method of recording and assessing core and chip sample	•Recoveries are noted at the time of drilling and recorded in the
recovery	recoveries and results assessed.	MZM database.
	• Measures taken to maximise sample recovery and ensure	•Triple tubingwas usedwithintheweatheredzones tomaximise

Criteria	JORC Code explanation	Commentary
	representative nature of the samples.	ore recovery.
	• Whether a relationship exists between sample recovery and grade	•Close to 100% of core was recovered.
	and whether sample bias may have occurred due to preferential
	loss/gainof fine/coarse material.
Logging	• Whether core and chip samples have been geologically and	•All samples have been logged to a level of detail to support the
	geotechnically logged to a level of detail to support appropriate	mineral resource estimations.
	Mineral Resource estimation, mining studies and metallurgical	•Qualitative: Lithology, alteration, mineralisation.
	studies.	•Quantitative: Sample assays.
	• Whether logging is qualitative or quantitative in nature. Core (or	•The entire length of the hole is geologically logged.
	costean, channel, etc) photography.	•All drill core is photographed.
	• The total length and percentage of the relevant intersections
	_logged. _
Sub-	• If core, whether cut or sawn and whether quarter, half or all core	•Sample sizes are considered appropriate for the nature of the test
sampling	taken.	work.
techniques	• If non-core, whether riffled, tube sampled, rotary split, etc and
and sample	whether sampled wet or dry.
preparation	• For all sample types, the nature, quality and appropriateness of
	the 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, including for instance results for field
	duplicate/second-half sampling.
	• Whether sample sizes are appropriate to the grain size of the
	_material being sampled. _
Quality of	• The nature, quality and appropriateness of the assaying and	•The metallurgical samples were assayed at the CSIRO laboratory
assay data	laboratory procedures used and whether the technique is	using the ICP-MS technique.
and	considered partial or total.
laboratory	• For geophysical tools, spectrometers, handheld XRF instruments,
tests	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 _

Criteria	JORC Code explanation	Commentary
	acceptable levels of accuracy (ie lack of bias) and precision have
	_been established. _
Verification	• The verification of significant intersections by either independent	•All data has been checked internally for accuracy by senior MZM
of sampling	or alternative company personnel.	geological and CSIRO staff.
and	• The use of twinned holes.	•No adjustments have been made to assay data.
assaying	• Documentation of primary data, data entry procedures, data
	_verification, data storage (physical and electronic) protocols. _
Location of	• Accuracy and quality of surveys used to locate drill holes (collar	•All collar coordinates were collected using handheld GPS in MGA
data points	and down-hole surveys), trenches, mine workings and other	94 – Zone 51.
	locations used in Mineral Resource estimation.
	• Specification of the grid system used.
	• Quality and adequacy of topographic control.
Data	• Data spacing for reporting of Exploration Results.	•The metallurgical test work drill holes have been selected based
spacing and	• Whether the data spacing and distribution is sufficient to establish	on their representivity of the Yanneri Ridge Orebody.
distribution	the degree of geological and grade continuity appropriate for the	•The metallurgical samples have been composited to produce two
	Mineral Resource and Ore Reserve estimation procedure(s) and	bulk samples.
	classifications applied.
	• _Whether sample compositing has been applied. _
Orientation	• Whether the orientation of sampling achieves unbiased sampling	•All drill holes are drilled vertically as the stratigraphy is generally
of data in	of possible structures and the extent to which this is known,	sub-horizontal.
relation to	considering the deposit type.	•There is no known sample biasing.
geological	• If the relationship between the drilling orientation and the
structure	orientation of key mineralised structures is considered to have
	introduced a sampling bias, this should be assessed and reported
	if material.
Sample	• The measures taken to ensure sample security.	•NA
security
Audits or	• The results of any audits or reviews of sampling techniques and	•The data and sampling techniques are reviewed internally.
reviews	data.	•Audits have also been completed by Mineral Processors WA,
		Snowdens and CSIRO.

Section 2 Reporting of Exploration Results

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

Criteria	JORC Code explanation	Commentary
Mineral	• Type, reference name/number, location and ownership including	•The Butcherbird Project consists of a single granted exploration
tenement	agreements or material issues with third parties such as joint	license – E52/2350.
and land	ventures, partnerships, overriding royalties, native title interests,	•The tenure is 100% owned by Montezuma Mining Corporation Ltd.
tenure	historical sites, wilderness or national park and environmental
status	settings.
	• The security of the tenure held at the time of reporting along with
	any known impediments to obtaining a licence to operate in the
	area.
Exploration	• Acknowledgment and appraisal of exploration by other parties.	•The historical exploration data has been collected by various
done by		parties and has been reported to high standards.
other		•The methods of exploration and techniques used are considered
parties		appropriate for the deposit types sought (Mn, Cu)
Geology	• Deposit type, geological setting and style of mineralisation.	•Butcherbird is a stratiform sedimentary manganese deposit.
		•The deposits are hosted within the Ilgarari Formation which is
		generally flat lying with gentle open folding in places.
		•The manganese mineralisation within the ore zones is divided into
		three distinctive units – a high grade manganiferous cap,
		supergene enrichedmanganiferouslaterite and basalshale.
Drill hole	• A summary of all information material to the understanding of the	•See historical ASX releases regarding the Butcherbird Mineral
Information	exploration results including a tabulation of the following	Resources.
	information for all Material drill holes:
	o easting and northing of the drill hole collar
	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

Criteria	JORC Code explanation	Commentary
	o hole length.
Data	• In reporting Exploration Results, weighting averaging techniques,	•NA
aggregation	maximum and/or minimum grade truncations (eg cutting of high
methods	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. _
Relationshi	• If the geometry of the mineralisation with respect to the drill hole	•NA
p between	angle is known, its nature should be reported.
mineralisati	• If it is not known and only the down hole lengths are reported,
on widths	there should be a clear statement to this effect (eg ‘down hole
and	length, true width not known’).
intercept
lengths
Diagrams	• Appropriate maps and sections (with scales) and tabulations of	•NA
	intercepts should be included for any significant discovery being
	reported These should include, but not be limited to a plan view of
	_drill hole collar locations and appropriate sectional views. _
Balanced	• Where comprehensive reporting of all Exploration Results is not	•NA
reporting	practicable, representative reporting of both low and high grades
	and/or widths should be practiced to avoid misleading reporting of
	_Exploration Results. _
Other	• Other exploration data, if meaningful and material, should be	•NA
substantive	reported including (but not limited to): geological observations;
exploration	geophysical survey results; geochemical survey results; bulk
data	samples – size and method of treatment; metallurgical test results;
	bulk density, groundwater, geotechnical and rock characteristics;
	potential deleterious or contaminating substances.

Criteria	JORC Code explanation	Commentary
urther work	• The nature and scale of planned further work (eg tests for lateral	•Phase 2 of the metallurgical test work is planned to commence
	extensions or depth extensions or large-scale step-out drilling).	shortly.
	• Diagrams clearly highlighting the areas of possible extensions,
	including the main geological interpretations and future drilling
	_areas, provided this information is not commercially sensitive. _