ELEMENTOS LIMITED — Interim / Quarterly Report 2014

Jul 30, 2014

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31 July 2014

QUARTERLY REPORT JUNE 2014

Highlights

• $2.1M capital raising program commenced, including $0.58M private placement and $1.52M partially underwritten renounceable rights issue

• Acquisition of 100% of the Cleveland project

• Significant Exploration Target defined at the Cleveland tin and copper project

• Cleveland Tailings JORC Mineral Resource estimate upgraded to Indicated category

• Selwyn Range Joint Venture established

Elementos Limited (ASX: ELT) (“Elementos” or the “Company”) activities this quarter have concentrated on the technical evaluation of the Cleveland project. The focus is on delivering a low cost strategy for developing the tailings reprocessing plant prior to re-opening the underground mine. Using the information gathered from the technical evaluation, the board has been able to map the development program for the next twelve months.

The Company’s Managing Director, Calvin Treacy, attended the ITRI International Tin conference in Penang, Malaysia during the quarter, and met with industry players. The conference featured presentations from Yunnan Tin, Minsur, German Federal Institute for Geosciences and Natural Resources, and other industry participants. The general consensus from within the conference was that demand for tin will continue to grow in line with the global economy, but tin supply faces the challenges of declining grades and resource depletion, with few new viable projects in the short to medium term pipeline. These factors combined support the positive outlook for future tin prices. The conference was also an excellent forum to continue the development of strategic relationships with established industry participants.

Capital Raising

During the quarter, the Company completed a private placement to Sophisticated Investors raising $0.58M, and commenced a 1 for 5 rights issue at 1.2 cents per share to raise $1.52M, of which $0.52M was underwritten. The rights issue has been well supported by current shareholders raising $1M, and the shortfall placement is currently being finalised.

Cleveland Acquisition EL7/2005

The Company renegotiated the terms for the acquisition of the remaining 50% interest in the Cleveland project during the quarter. The acquisition was completed in early July 2014, with a cash payment of $0.15M and the issue of 29M Elementos shares.

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With the acquisition finalised, the Company now enters the next phase of development, with 100% ownership of the Cleveland Mine, strong cash reserves and no future payment obligations.

Cleveland Tin Project, Tasmania

Cleveland remains the focus of the Company, with the project continuing to meet expectations in terms of development potential and exploration opportunities for tin, copper, tungsten, lead, zinc and silver.

Cleveland Tin and Copper Exploration Target[1]

During the quarter, the Company released an Exploration Target for the Cleveland tin and copper deposit. The tonnage and grade ranges are tabulated below and the full details of the estimates are outlined in Annexure A.

Low Tonnage Estimate	High Tonnage Estimate	Tin Grade Range Estimate	Containe d Tin Low Estimate (t)	Containe d Tin High Estimate (t)	Copper Grade Range Estimate (Rounded)	Contained Copper Low Estimate (t)	Containe d Copper High Estimate (t)
3,000,000	16,000,000	0.6-0.7%	20,000	110,000	0.2-0.2%	10,000	30,000

It is important to note that while this estimate is based on extensions of currently known tin-copper lenses, both along strike and down dip, the potential quantity and grade of the Exploration Target is conceptual in nature. There has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource. It is also important to note the Exploration Target has been defined based on exploration results and historical mining information.

The Exploration Target was estimated by extending the boundaries of the known mineralisation and assessing the factors listed below:

• Thicknesses of the known tin-copper lenses in the existing JORC Mineral Resources;

• Interpretations and extrapolations of the geology and mineralisation of the known tin-copper lenses;

• An assessment of the historical drilling results; and

• Historical resource and mining information.

A range of volumes of the potential mineralised areas were estimated based on the above information, and the grade was estimated based on the known grade ranges of the existing resource.

The Company has established drilling priorities, some of which are from surface and others are from underground. The Company’s current intention is to undertake a new drilling program when operations commence. The commencement date for operations has not yet been determined.

For further information please refer to Annexure A for details and the ASX announcement “Cleveland Tin and Copper Exploration Target Defined” released on 2 April 2014.

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Cleveland Tailings Resource Upgrade[1]

During the quarter, the Company released an upgraded Mineral Resource in accordance with JORC (2012) for the Cleveland Tailings project. Independent geological consultants MiningOne reviewed the Cleveland Tailings Mineral Resource, and the Mineral Resource was upgraded from the Inferred to Indicated Category.

A summary of the upgraded Mineral Resource is tabulated below:

Cleveland Tin and Copper Tailings Mineral Resource 17 June 2014	Cleveland Tin and Copper Tailings Mineral Resource 17 June 2014	Cleveland Tin and Copper Tailings Mineral Resource 17 June 2014	Cleveland Tin and Copper Tailings Mineral Resource 17 June 2014
	17 June 2014
	0% Sn Cut-Off
Category	Tonnage	% Sn as Cassiterite	% Cu
Indicated	3,850,000	0.30	0.13
Total	3,850,000	0.30	0.13

Table A – June 2014 JORC Mineral Resource Estimate for Cleveland Tin and Copper Tailings Resource

Selwyn Range Project, Queensland, Australia

During the quarter, the Company signed a binding term sheet for an earn-in joint venture with Below Ground Technology Pty Ltd (“BGT”), to explore for copper and gold at the Selwyn Range project. The terms of the joint venture are:

• The right to earn 51% of the project by investing $0.6M over 3 years; and

• The option to increase its interest by a further 19%, by investing an additional $0.6M over a further 2 years.

Once BGT earns a 70% interest, each party can either contribute or dilute according to an agreed formula and work program. If either party achieves a 90% interest in the project, the other party’s 10% interest immediately converts to a 2% NSR.

The agreement is subject to the finalisation of a full joint venture agreement.

Millenium Project, Queensland, Australia

During the quarter, Chinalco Yunnan Copper Resources Ltd (“CYU”) the Company’s joint venture partner at Millenium, undertook a drilling program of four RC holes. Please refer to the CYU ASX announcement on 5 June 2014 titled “New Copper/Gold Discovery at Jubilee Prospect” for the assay results.

A deep-penetrating induced polarisation geophysical survey will be undertaken by CYU later in the year to map the mineralisation and provide targets for further drilling at Millenium.

1 Previous Disclosure 2012 JORC Code - This information on the Cleveland Tin and Copper project is extracted from the report titled “Cleveland Tailings Resource Upgrade” created on 17[th] of June 2014,The report is available to view on the Elementos website (www.elementos.com.au). The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources or Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changes. 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.

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Santo Domingo, Argentina

During the quarter, there were no exploration activities at Santo Domingo. Joint Venture negotiations continue.

Tamaya, Chile

During the quarter, the second year anniversary of the earn-in joint venture agreement occurred. The Company elected not to meet a 5,000 metre drilling commitment as part of the earn-in joint venture (earning 50% interest in the project by spending US$7m over 3 years). As the joint venture requirements were not met, the earn-in agreement lapsed. The Company no longer has any rights to this project.

Cash Resources

At the end of the period, the Company had cash resources of $0.68M. At the completion of the capital raising program, the Company anticipates cash resources of approximately $1.75M.

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

COMPETENT PERSON STATEMENT

The information in this report that relates to Exploration Targets is based on information compiled by Mick McKeown of Mining One Consultants, a Competent Person who is a Fellow of the Australian Institute of Mining and Metallurgy. Mick McKeown is a full-time employee of Mining One Pty Ltd, a mining consultancy which has been paid at usual commercial rates for the work which has been completed for Elementos Limited.

Mick McKeown has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken 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’ Mick McKeown 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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Elementos Ltd held the following interests in exploration tenements at the end of the quarter:

quarter:
Tenement Name	Tenement Number	Area (Hectares)	Elementos Interest	Location of Tenements
Santo Domingo Millenium Selwyn Range Cleveland	1124-493-G-07 1124-094-G-09 1124-133-G-09 1124-454-G-09 1124-643-G-10 1124-368-G-06 1124-385-G-06 1124-494-G-07 1124-495-G-07 1124-496-G-07 1124-497-G-07 1124-498-G-07 1124-499-G-07 1124-500-G-07 1124-265-G-08 1124-336-G-08 1124-633-G-10 1124-022-G-11 1124-131-O-09 1124-132-O-09 ML 2512 ML 2761 ML 2762 ML 7506 ML 7507 EPM 18402 EPM 18773 EPM 18793 EPM 18982 EPM 19014 EPM 19036 EPM 19371 EPM 19375 EPM 19426 EL7/2005 EL9/2006 EL15/2011	497 511 1458 500 1940 2158 4995 900 1338 900 900 900 900 900 2616 368 1179 1500 4953 9203 4 20 16 50 45 5146 3859 2251 4184 6111 3216 3860 6400 643 1798 4195 3358	Nil - earning Nil - earning Nil - earning Nil - earning Nil - earning Nil – earning Nil – earning Nil – earning(i) Nil – earning(i) Nil – earning(i) Nil – earning(i) Nil – earning(i) Nil – earning(i) Nil – earning(i) Nil – earning(i) Nil – earning(i) Nil – earning(i) Nil – earning(i) Nil – earning(i) Nil – earning(i) Nil - earning Nil - earning Nil - earning Nil - earning Nil - earning 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%	Argentina Argentina Argentina Argentina Argentina Argentina Argentina Argentina Argentina Argentina Argentina Argentina Argentina Argentina Argentina Argentina Argentina Argentina Argentina Argentina Queensland Queensland Queensland Queensland Queensland Queensland Queensland Queensland Queensland Queensland Queensland Queensland Queensland Queensland Tasmania Tasmania Tasmania

(i) Tenements/Cateos in process of being granted/transferred

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During the quarter, the remaining 50% interest in EL7/2005 was acquired:

Tenement Name	Tenement Number	Area (Hectares)	Elementos Interest	Location of Tenement
Cleveland	EL7/2005	1798	100%	Australia

During the quarter, the following tenements were disposed of:

Tenement Name	Tenement Number	Area (Hectares)	Elementos Interest	Location of Tenements
Tamaya	Adrianita 1 a 35 Aurora 1 a 20 Camposanto 8 a 17 Cerrillos Primera Chepillo 1 a 4 Guias Altas La Borracho 1 a 3 La Lusitania 1 a 5 La Sol 1 a 4 Lecaros 1 a 120 Margarita 1 a 7 Olga 1 a 20 San Cristobal 1 a 30 Suerte 10-15, 25-30 Tacora 1 a 65 Tuhuimco 1 al 40 Talabre 1 al 25 Talcan 1 al 18 Talpuna 1 al 34 Tamarugo 1 al 44 Tamaya 1 a 120 Tanume 1 al 28 Tatio 1 al 19 Temo 1 al 2 Ticalhue 1 al 17 Tignamar 1 al 26 Tipay 1 al 14 Tocomar 1 al 20 Toconce 1 al 18 Tolas 1 al 14 Tolten 1 al 17 Torca 1 al 5 Cerrillos 1 Cerrillos 2 Cerrillos 3 Cerrillos 4 Cerrillos 5 Cerrillos 6	175 100 41 5 19 4 15 25 13 600 35 100 150 50 606 400 250 168 284 409 600 244 176 9 102 254 125 200 180 140 149 42 300 200 100 300 300 300	Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning Nil – earning	Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile Chile

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ANNEXURE A

EXPLORATION TARGET - SUMMARY OF RELEVANT EXPLORATION DATA

Table 1: Hall’s A Line Intersections

	Hole No Depth From Depth To Down-Hole Length % Tin % Copper
Hall’s A Line	C1255 639.7m 654.3m 14.6m 1.68 0.18
	C1554 99.4m 109.9m 10.5m 1.95 0.26
	C1574 75.0m 89.6m 14.6m 0.71 0.07

Table 2: Hall’s C Line Intersections

	Hole No Depth From Depth To Down-Hole Length % Tin % Copper
Hall’s C Line	C1526 307.9m 318.9m 11.0m 0.55 0.11
	C1580 278.0m 309.0m 31.0m 0.59 0.12

Table 3: Khaki Line Intersections

	Hole No Depth From Depth To Down-Hole Length % Tin % Copper
Khaki Line	C0969 683.3m 697.2m 13.9m 0.29 0.12
	C1615 112.5m 157.5m 45.0m 0.44 0.11
	C2004 85.9m 100.3m 14.4m 1.48 0.13

Table 4: Mined Resources, Currently Defined Resources and the Exploration Target

	Mined 1968-1986	Current Total Indicated	Exploration Target
		plus Inferred Mineral
		Resource
		(0.35% Tin Cut-Off)
Tonnage (Mt)	5.7	7.4	3-16
Tingrade(%)	0.74	0.65	0.6-0.7
Contained tin(t)	42,000	48,000	20,000-110,000

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Table 5: Exploration Target Summary - Lens by Lens

	Low Tonnage	High Tonnage	Low Tin (%)	Low Copper (%)	High Tin (%)	High Copper (%)	Tin Low Est (t)	Copper Low Est (t)	Tin High Est (t)	Copper High Est (t)
Lens
Khaki	529,000	2,644,000	0.6	0.2	0.7	0.2	3,200	1,100	18,500	5,300
Henry's	107,000	533,000	0.6	0.2	0.7	0.2	600	200	3,700	1,100
B South / Hall's B1	584,000	2,918,000	0.6	0.2	0.7	0.2	3,500	1,200	20,400	5,800
Battery	309,000	1,544,000	0.6	0.2	0.7	0.2	1,900	600	10,800	3,100
Hall's A1	134,000	672,000	0.6	0.2	0.7	0.2	800	300	4,700	1,300
Hall's B3	452,000	2,260,000	0.6	0.2	0.7	0.2	2,700	900	15,800	4,500
Hall's C3	1,082,000	5,410.000	0.6	0.2	0.7	0.2	6,500	2,200	37,900	10,800
Total	3,000,000#	16,000,000#					20,000+	10,000+	110,000+	30,000+

Rounded to the nearest million tonnes

• Rounded to the nearest ten thousand tonnes

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