ELEMENTOS LIMITED — Interim / Quarterly Report 2013

Jul 30, 2013

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31 July 2013

QUARTERLY REPORT JUNE 2013

Highlights

• Elementos to merge with Rockwell Minerals Limited to create a diversified minerals company, including an advanced stage tin-copper and tungsten project with significant exploration potential

• Copper, gold and by-product mineralisation, including gallium, identified at the El Arrierro prospect at the Santo Domingo project

Elementos Limited (ASX: ELT) (“Elementos” or the “Company”) activities this quarter have included finalisation of the merger with Rockwell Minerals Limited (“Rockwell”), and a sampling program at Santo Domingo in Argentina.

MERGER WITH ROCKWELL

During the quarter, the Company advanced the previously reported merger discussions with Rockwell including the completion of due diligence and signing of a conditional Merger Implementation Deed (“MID”). Subsequent to the end of the quarter, the Company signed an unconditional MID which will facilitate the closure of the transaction.

Rockwell is an Australian unlisted public Company. Rockwell owns 50% of the Cleveland tin-copper and tungsten project in north-west Tasmania, together with an option to acquire the remaining 50% interest.

The merger creates a diversified metals company, including the Cleveland advanced tin-copper and tungsten deposits in Tasmania, and a number of prospective gold and copper assets in South America and Australia.

The merger of Elementos and Rockwell has a strong strategic rationale:

• Positions Elementos with a more advanced asset, reducing the Company‟s exposure to greenfield exploration;

• Secures a new advanced stage project with near term development potential, and significant exploration upside;

• Provides a potential valuation up-lift from relatively short-term work programs;

• Enables a significant exposure to tin, which the board believes has attractive supply and demand fundamentals; and

• Bestows a management team and board with the expertise and experience to move advanced assets through financing and into development.

The merger is subject to obtaining all the necessary shareholder and regulatory approvals. It is expected the transaction will close by late September 2013.

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Rockwell Merger Agreement

Subsequent to the end of the quarter, Elementos has agreed an unconditional MID to acquire all the issued shares of Rockwell through the issue of Elementos shares. On completion of the merger, Rockwell shareholders will own 61.5% of the total issued share capital of the merged group, and the present Elementos shareholders 38.5%.

The Directors of Rockwell have resolved unanimously to recommend that Rockwell shareholders accept the proposal, and intend accepting the proposal with respect to their own shares.

Calvin Treacy, Chairman of Rockwell, will join the board of Elementos as the Managing Director. Corey Nolan will become an Executive Director and Richard Seville will join the board as a Non-Executive Director on closing of the merger. A. Anthony McLellan, James Calaway and Mark McCauley will resign from the board following completion of the transaction.

All the other terms of the offer remain the same as those outlined in the release dated 6 June 2013.

It is contemplated that a Bidders Statement and Notice of Meeting will be sent to shareholders in the week commencing 5[th] August 2013. The transaction is still subject to achieving the necessary shareholder and regulatory approvals. It is expected the transaction will close by the end of September 2013.

Development activities planned for Cleveland on completion of the merger include:

• Finalise environmental permitting;

• Complete a scoping study to identify the optimal development scenarios for the tin-copper, tungsten and tin tailings, including capital and operating costs;

• Implement a dewatering program to re-establish access to the Cleveland mine; and

• Progress metallurgical test-work and design a new process flow sheet utilising the latest tin processing technologies, which have substantially advanced since mine closure.

Research Report on Cleveland Project

During the quarter, a research report was prepared by corporate advisors, Beer & Co, on the Cleveland project.

The report provides a detailed analysis of the Cleveland project following an analyst site visit to Tasmania. The report includes a valuation of the Cleveland project and an analysis of the merged Company compared to its tin industry peers. The research report is available on our website at www.elementos.com.au.

SANTO DOMINGO

During the quarter, the Company announced the results of a mapping and sampling program at the El Arriero porphyry prospect at the Santo Domingo project, Argentina.

The most recent mapping and sampling programs have focused on testing the copper-molybdenum mineralisation around the El Arriero porphyry, and follow up sampling of the high-grade gold structures at El Arriero West.

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The El Arriero prospect is a strong porphyry-style alternation zone with a minimum interpreted footprint of 900 metres by 500 metres. Within the periphery of the alteration zone, there are number of gold-rich sheeted structures which extend into the porphyry mineralisation.

Highlights of the sampling program included:

• El Arriero - copper values up to 1% copper as disseminated style mineralisation and molybdenum up to 566ppm in narrow structures and quartz veinlets within the porphyry zone;

• El Arriero South - representative panel samples of mineralised breccia in porphyry have intersected up to 1.75% copper and 31ppm gallium. Selective samples of only veinlets within alteration zone include assays up to 3.64% copper, 66ppm molybdenum and 17ppm gallium; and

• El Arriero West - narrow high-grade structures including 0.1 metres at 29g/t gold and 11.8g/t silver.

The new sampling program at El Arriero has highlighted the potential for copper – molybdenum porphyry mineralisation in an area thought to be principally gold dominant. In addition, sampling has highlighted the potential for other by-product metals such as gallium.

Further follow up sampling and mapping is required at the El Arriero prospect assessing the copper–molybdenum mineralisation potential prior to any future drilling.

TAMAYA, CHILE

During the quarter, there were no exploration activities at Tamaya. The Company is currently assessing all the historical exploration data, including more than 5,000 metres of drilling data, to assess the next steps for the project. The bank guarantee was refunded and the proceeds used to pay for drilling costs from the 5,000 metre program.

MANANTIALES, ARGENTINA

During the quarter, there were no exploration activities at Manantiales. The Company is currently negotiating with the vendor a restructure of its Option-toPurchase contract, to defer any payments during 2013.

MILLENIUM, AUSTRALIA

During the quarter, there were no exploration activities at Millenium. The Company is in discussions with a number of parties about forming a joint venture over the Millenium properties.

CASH RESOURCES

At the end of the period, the Company had cash resources of $371,000. During the quarter the Company completed a Share Purchase Plan (“SPP”) and raised $157,000. The SPP funds are being applied to completing the merger with Rockwell. Subsequent to the end of the quarter, the Company made a placement of $100,000 to sophisticated investors.

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For more information, please contact:

Corey Nolan

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

Elementos is an Australian, ASX-listed, copper and gold exploration company, with projects in Argentina, Chile and Australia. The properties are all in mineral rich, highly prospective provinces, with developed infrastructure nearby.

Please visit us at www.elementos.com.au

COMPETENT PERSON STATEMENT – MANANTIALES, SANTO DOMINGO, TAMAYA AND MILLENIUM

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Gustavo Delendatti, a member of the Australian Institute of Geoscientists. Mr Delendatti is a full-time employee of Elementos Ltd and its subsidiaries, and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which it is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the „Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.‟ Mr Delendatti consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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Appendix 5B Mining exploration entity quarterly report

4Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/2010.

Name of entity

ELEMENTOS LIMITED

ABN 49 138 468 756	Quarter ended (“current quarter”)
49 138 468 756	30 JUNE 2013

Consolidated statement of cash flows

Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration and evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (return of bank guarantee) Net Operating Cash Flows	Current quarter $A’000	Year to date $A’000
	(632) (343) 1 514	(2,848) (1,571) 21 514
	(460)	(3,884)
Cash flows related to investing activities 1.8 Payment for purchases of: (a)prospects (b)equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a)prospects (b)equity investments (c)other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)	(1) 14	(1) 14
	13	13
	(447)	(3,871)

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(447)	(3,871)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other: Cost of share issue (adjust for IPO) Net financing cash flows	157 (37)	2,466 (235)
	120	2,231
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end ofquarter	(327) 694 4	(1,640) 2,013 (2)
	371	371

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
		98
		Nil
1.25	Explanation necessaryfor an understandingof the transactions

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

Nil

• 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

Nil

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount used $A’000
	Nil	Nil
	Nil	Nil

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	10
	Nil
	Nil
	385
Total	395

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	328	632
	43	62
Total: cash at end of quarter(item 1.22)	371	694

Changes in interests in mining tenements

Tenement reference	Nature of interest (note (2)	Interest at beginning ofquarter	Interest at end of quarter

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1 Preference+securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital,buy-backs,redemptions
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital,buy-backs	163,071,447	163,071,447
	4,817,789 8,722,238	4,817,789 8,722,238	1.49 cents 1.80 cents	1.49 cents 1.80 cents
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured,converted
7.7 Options (description and conversion factor) Listed Options Unlisted Options 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	32,952,052 4,500,000 1,500,000 1,200,000 500,000 1,000,000 400,000 2,350,000	32,952,052 Nil Nil Nil Nil Nil Nil Nil	Exercise price 6.0 cents 22.6 cents 30.0 cents 22.6 cents 22.6 cents 32.6 cents 6.0 cents 6.0 cents	Expiry date 9 April 2014 23 October 2015 23 December 2013 7 September 2015 30 November 2015 18 January 2017 3 December 2016 20 January2017
7.11 Debentures (totals only)
7.12 Unsecured notes(totals only)

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

• 2 This statement gives a true and fair view of the matters disclosed.

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Sign here: ............................................................ Date: 31 July 2013 (Director/Company secretary)

Print name: Linda Scott

Notes

• 1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

• 2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

• 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

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• See chapter 19 for defined terms.

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