ELEMENTOS LIMITED — Capital/Financing Update 2014

Jun 1, 2014

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2 June 2014

MARKET UPDATE

Elementos Limited (ASX: ELT) (“Elementos” or the “Company”) recently announced the retraction of its Pre-Feasibility Study ( PFS ) on the Cleveland tin project.

The Company reiterates its warning to investors against using statements contained in the withdrawn PFS as a basis for investment decisions, and brokers and analysts in using these statements as the basis for giving advice in the Company’s securities.

The Company is now in the process of undertaking the technical reviews necessary to upgrade the inferred tailings resource to an indicated resource. Subject to the outcome of these reviews, the Company will look towards issuing an upgraded resource statement for the tailings project.

The Company will also continue to undertake the further technical studies and reviews to allow it to issue a new and revised PFS on the Cleveland Project.

The Company continues to have a clear strategic path forward that will transition the Company from explorer to developer.

The Company’s objectives over the next 12 to 24 months remain as follows:

• 1. Cleveland Tailings Redevelopment Project – The Company’s priority focus in the short term remains the development of the tailings project;
• 1. Cleveland Underground Mine Re-Development – The Company is currently working with its consultants at MiningOne and Pitt&Sherry on advancing technical aspects of the project; and
• 1. Cleveland Tungsten – The Company plans to undertake a scoping study to assess the technical and economic parameters of the project. The company will then assess its strategic options in relation to the project and whether it should identify a strategic development partner for the project.

The Directors continue to strongly believe in the potential of the Cleveland tin project. The assets form the foundation strengths of our Company and the building blocks of a potential new tin operation in Tasmania.

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Cleveland Tin Mine History and Asset Strength

Cleveland has a long and significant history in Australian tin mining and processing. Cleveland was at the forefront of technological development in trackless mining equipment technology and one of the first to implement tin-flotation. Cleveland closed in 1987 when the tin price was less than US$8,000 per tonne. Tin is now trading at more than US$23,000 tonne on the London Metals Exchange and the Company believes that the unexploited resources and exploration potential have significant value and development potential.

Cleveland’s assets and favourable development attributes include:

• Independently reported JORC Mineral Resources defined from 134,000 metres of drilling in 2040 holes;

• Tin and tungsten exploration potential which supports a future drilling program;

• Significant amount of independent technical study work on the Cleveland tin tailings and underground mine including geotechnical, mining, metallurgy, infrastructure and process design; known mining and metallurgical characteristics of the deposit from 20 years of historical mining and processing operations at the site;

• Advanced stage environmental permitting for the tailings development

  • proposal and dewatering of the underground mine;

• Existing development infrastructure including roads, power, water, electricity, export port, and experienced mining labour; and

• A brownfield site with an existing underground mine decline (currently flooded and requiring rehabilitation) which has the potential to lower the capital costs of developing a future underground mine.

The Company also believes it is exposed to a commodity with attractive supply and demand dynamics, and price outlook. The Company recently attended the annual International Tin Conference 2014 in Malaysia. The following are some of the highlights from technical papers presented at the conference indicating the positive outlook for future tin prices:

• Mine supply is constrained due to the falling production from alluvial sources (China and Indonesia), lower forecast production from San Rafael, the world’s largest tin mine from 2017, and lack of greenfield exploration in the last three decades;

• Higher prices required are to justify the development of new hard-rock tin mines due to factors including low grade, complex metallurgy and small deposit size. This results in higher capital expenditure and operating costs;

• Demand growth is real, steady and sustainable, with new applications adding demand pressure; and

• Potential for a continuing paradigm shift in tin pricing analogous to the price spikes in iron ore, tungsten, nickel and lead prices during 2005 to 2010.

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In addition to its Cleveland tin assets, the Company also has exposure to other projects and commodities. Since the completion of the merger with Rockwell Minerals Ltd in late 2013, the Company has been actively pursuing strategies to monetise non-core assets, and add value to the core package of tenements at Cleveland, including:

• Cleveland tungsten project – large scale porphyry tungsten deposit which it believes has the potential to be amendable to low cost bulk mining techniques with simple metallurgy;

• Cleveland regional lead-zinc exploration - structures containing high values of lead and zinc recently identified south of the Cleveland tin deposit;

• Joint ventures at the Company’s copper projects, Millenium and Selwyn Range, in the prospective Mt Isa Inlier, Queensland; and

• A review of the Company’s gold-copper porphyry project in South America, with a view to seeking a possible joint venture partner for this project.

For more information, please contact:

Calvin Treacy

Managing Director Phone: +61 7 3221 7770 Email: admin@elementos.com.au

Elementos is an Australian, ASX-listed, diversified metals company, including Cleveland, an advanced stage tin-copper and tungsten project in Tasmania, together with a number of prospective copper and gold assets in South America and Australia.

Please visit us at www.elementos.com.au

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