ELEMENTOS LIMITED — Interim / Quarterly Report 2015

Oct 29, 2015

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30 October 2015

SEPTEMBER QUARTERLY REPORT

HIGHLIGHTS:

• Pre-feasibility Study completed for the reprocessing of the tailings Mineral Resource, including a statement of Ore Reserves.

• Open Pit and Underground Scoping Studies completed.

• Confirmation of the economic viability of the staged development of Cleveland.

Elementos Limited (ASX: ELT) (“Elementos” or the “Company”) is pleased to report on activities during the September quarter.

The completion of the Pre-feasibility and Scoping Studies were major activities during the quarter. The Company remains on track to meet its primary objective of being the next Australian tin producer.

CLEVELAND PROJECT UPDATE

S t a g e 1 – T a i l i n g s R e p r o c e s s i n g

The Company completed a Pre-feasibility Study[1] (“PFS”) for the reprocessing of the Tailings Mineral Resource and has estimated an Ore Reserve of 3.7 million tonnes (Mt) @ 0.29%[2] (0% cut-off grade).

The PFS demonstrated that the reprocessing of tailings is both technically and financially viable, generating A$55m (pre-tax) in cash over a 7 year mine-life. At current prices, the project is profitable and cash flow positive, indicating a robust project that trades through the cycles.

Production from stage 1 is planned for 2017.

S t a g e 2 – O p e n P i t M i n i n g

During the quarter, the Company received an Open Pit Scoping Study, independently prepared by AMC Consultants Pty Ltd (AMC). The study was based on the previously announced Mineral Resource of 0.8Mt at 0.81% Sn and 0.27% Cu[3] .

The AMC study identified five viable open pits, containing a mining inventory[4] of 0.6 Mt at 0.50% Sn and 0.14% Cu. The open pit will supplement the feed from the proposed tailings

1 Announced per the JORC Code 2012 on 3 August 2015 “Cleveland Tailings PFS”.

2 Announced per the JORC Code 2012 on 3 August 2015 “Cleveland Tailings Ore Reserve”.

3 Announced per the JORC Code 2012 on 3 March 2015 “Cleveland Open Pit - High-Grade Mineral Resource Defined”

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reprocessing operation, providing additional high-grade feed into the upgraded process plant.

The study concluded that the open-pit project is financially robust and technically low-risk; with over 98% of the ore tonnes included in the mining inventory being in the Indicated Mineral Resource category. The projected additional cash flow from the open-pit project is A$21 million (pre-tax);

Production from the stage 2 open-pit mine is scheduled to start in 2018.

S t a g e 3 - U n d e r g r o u n d M i n i n g

AMC also completed an Underground Scoping Study, which examined the technical and economic viability of mining and processing the previously developed tin-copper deposit and a separate but large tungsten porphyry deposit. As such, the viability of the underground operation was assessed as an extension to the proposed tailings and openpit operations with shared services, plant and infrastructure.

The study provided a high-level mine design, mining inventory, production schedule, process plant flowsheet, and cost estimate for the potential underground operation. Based on the previously announced Mineral Resource[5] , the study identified a mining inventory[6] of 1.9Mt of tin-copper ore grading 0.61% Sn and 0.22% Cu, and 1.7Mt of tungsten ore grading 0.31% WO3.

The findings demonstrate that underground operations will extend the Cleveland mine life by eight years, doubling the life of the project, and adding a projected additional A$90 million to the project’s pre-tax cash flows.

Production from the stage 3 underground mine is scheduled to commence in FY2021.

A p p r o v a l s a n d a p p l i c a t i o n s

During the quarter, the Company continued to progress the development and environmental approvals process. The Company has every reason to believe at this point in time that approval is likely given the significant government and stakeholder support to rehabilitate historical legacies as proposed in the mine plan. The company therefore sees the risk of not obtaining approval as low.

The Company’s Mining Lease Application (MLA) also progressed, with further discussions held with the Department of State Growth (Mineral Resources Tasmania). The department has been very supportive in working with the Company to progress it application and the Company has every reason to believe at this point in time that approval is likely.

4 A mining inventory is not an Ore Reserve. Refer to Cautionary Statements attached to this announcement.

5 Announced per the JORC Code 2012 on 3 March 2015 “Cleveland Open Pit - High-Grade Mineral Resource Defined” 6 A mining inventory is not an Ore Reserve. Refer to Cautionary Statements attached to this announcement.

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Regional map showing Mining Lease Application, Exploration Licenses and Infrastructure

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SUPPORTING ACTIVITIES

During the quarter, the Company completed extensive marketing initiatives including presenting at the Proactive Luncheon events in Melbourne and Sydney, and completing a road-show to sophisticated investors and brokerage firms.

As of a result of recent announcements, the Company was mentioned extensively in the media, with the CEO completing interviews with The Australian and ABC radio. Articles were published about the Company’s activities in the The Mercury, the Burnie Advocate, WIN TV and various mining publications, including the Mining News, Mining Weekly and Mining Monthly.

The Company held a community engagement meeting on Thursday the 10[th] of September in Waratah, Tasmania. The meeting was part of an ongoing community engagement program prior to planned production in 2017.

CORPORATE

During the quarter, the Company continued to reduce general and administration expenditure to invest all available funds into the marketing and development of the Cleveland Mine.

At the end of the quarter, the Company had cash reserves of $351k.

Next quarter, an estimated $283k is to be received from the ATO in relation to Research and Development activities completed in the 2015 financial year.

Further details of the Company’s financial activities during the quarter are set out in the Appendix 5B cash flow report.

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C a p i t a l s t r u c t u r e

At the end of the quarter, there were 767,479,642 fully paid ordinary shares and 38.85 million unlisted options on issue.

EXPLORATION

C l e v e l a n d M i n e , T a s m a n i a , A u s t r a l i a

No exploration activities were undertaken at Cleveland during the quarter, as all activities were related to mine development. Exploration Licence (EL) 15/2011 was relinquished in the quarter.

S e l w y n R a n g e P r o j e c t , Q u e e n s l a n d , A u s t r a l i a

There were no exploration activities at the Selwyn Range joint venture during the quarter. Non-prospective sub-blocks were relinquished across the tenement package as required by government regulations and the agreed schedule.

M i l l e n i u m P r o j e c t , Q u e e n s l a n d , A u s t r a l i a

There were no exploration activities at the Millenium joint venture during the quarter. Nonprospective sub-blocks were relinquished across the tenement package as required by government regulations and the agreed schedule.

EXPLORATION TENEMENTS

Elementos Ltd held the following interests in exploration tenements at the end of the quarter:

Tenement Name	Tenement Number	Area (Hectares)	Elementos Interest	Location of Tenements
Cleveland	EL7/2005	5993	100%	Tasmania
Millenium	ML 2512	4	100%	Queensland
	ML 2761	20	100%	Queensland
	ML 2762	16	100%	Queensland
	ML 7506	50	100%	Queensland
	ML 7507	45	100%	Queensland
	EPM 18402	2488	100%	Queensland
	EPM 18773	1866	100%	Queensland
	EPM 18793	1244	100%	Queensland
	EPM 18982	1244	100%	Queensland
	EPM 19014	1555	100%	Queensland
	EPM 19036	933	100%	Queensland
Selwyn Range	EPM 19371	3732	100%	Queensland
	EPM 19375	6220	100%	Queensland
	EPM 19426	622	100%	Queensland

EL 15/2011 was disposed of during the quarter. No new tenements were acquired during the quarter.

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DEVELOPMENT PROGRAM

As shown in the schedule below, subject to obtaining all the necessary approvals and project financing, first production is scheduled for commencement in 2017.

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For more information, please contact:

Tim McManus

Chief Executive Officer

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

Elementos is an Australian, ASX-listed metals company, focused on the development of Cleveland, an advanced stage tin-copper and tungsten project in Tasmania.

Please visit us at: www.elementos.com.au

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MINERAL RESOURCES AND ORE RESERVES

S t a g e 1

Tailings Mineral Resource (at 0% Sn cut-off) 7	Tailings Mineral Resource (at 0% Sn cut-off) 7	Tailings Mineral Resource (at 0% Sn cut-off) 7	Tailings Mineral Resource (at 0% Sn cut-off) 7	Tailings Mineral Resource (at 0% Sn cut-off) 7	Tailings Mineral Resource (at 0% Sn cut-off) 7
Category	Tonnage		Sn Grade			Cu Grade
Indicated	3.8 Mt		0.30%			0.13%
Table subject to rounding errors; Sn = tin, Cu = copper
Tailings Ore Reserve (at 0% Sn cut-off)8
Category	Tonnage	Sn Grade		Cu Grade	Contained Sn		Contained Cu
Probable	3.7 Mt	0.29%		0.13%	11 Kt		5 Kt

Table subject to rounding errors; Sn = tin, Cu = copper

S t a g e 2

Open Pit Tin-Copper Mineral Resource (at 0.35% Sn cut-off)9	Open Pit Tin-Copper Mineral Resource (at 0.35% Sn cut-off)9	Open Pit Tin-Copper Mineral Resource (at 0.35% Sn cut-off)9
Category	Tonnage	Sn Grade	Cu Grade
Indicated	0.8 Mt	0.81%	0.27
Inferred	0.01 Mt	0.99%	0.34

Table subject to rounding errors; Sn = tin, Cu = copper

S t a g e 3

Underground Tin-Copper Mineral Resource (at 0.35% Sn cut-off)10	Underground Tin-Copper Mineral Resource (at 0.35% Sn cut-off)10	Underground Tin-Copper Mineral Resource (at 0.35% Sn cut-off)10
Category	Tonnage	Sn Grade	Cu Grade
Indicated	4.2 Mt	0.67%	0.28%
Inferred	2.4 Mt	0.56%	0.19%
Table subject to rounding errors; Sn = tin, Cu = copper

Underground Tungsten Mineral Resource (at	Underground Tungsten Mineral Resource (at	0.20% WO3cut-off)11
Category	Tonnage	WO3Grade
Inferred	4 Mt	0.30%

Table subject to rounding errors; WO3 = tungsten oxide

7 Announced per the JORC Code 2012 on 17 June 2014 “Cleveland Tailings Resource Upgrade”

8 Announced per the JORC Code 2012 on 3 August 2015 “Cleveland Tailings Ore Reserve”

9 Announced per the JORC Code 2012 on 3 March 2015 “Cleveland Open Pit - High-Grade Mineral Resource Defined”

10 Announced per the JORC Code 2012 on 3 March 2015 “Cleveland Open Pit - High-Grade Mineral Resource Defined”

11 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.

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CAUTIONARY STATEMENTS

F o r w a r d - l o o k i n g s t a t e m e n t s

This document may contain certain forward-looking statements. Such statements are only predictions, based on certain assumptions and involve known and unknown risks, uncertainties and other factors, many of which are beyond the company’s control. Actual events or results may differ materially from the events or results expected or implied in any forward-looking statement.

The inclusion of such statements should not be regarded as a representation, warranty or prediction with respect to the accuracy of the underlying assumptions or that any forward-looking statements will be or are likely to be fulfilled.

Elementos undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this document (subject to securities exchange disclosure requirements).

The information in this document does not take into account the objectives, financial situation or particular needs of any person or organisation. Nothing contained in this document constitutes investment, legal, tax or other advice.

M i n e r a l R e s o u r c e s a n d O r e R e s e r v e s

Elementos confirms that Mineral Resource and Ore Reserve estimates used in this document were estimated, reported and reviewed in accordance with the guidelines of the Australian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code) 2012 edition.

Elementos confirms that it is not aware of any new information or data that materially affects the Mineral Resource or Ore Reserve information included in the “Cleveland Tailings Resource Upgrade” announced to the ASX on 17 June 2014, or the “Cleveland Open Pit - High-Grade Mineral Resource Defined” announced on 3 March 2015 and the “Cleveland Tailings Ore Reserve” released on the 3 August 2015.

The Company also confirms that all material assumptions and technical parameters underpinning the estimates in the Cleveland Mineral Resources and Reserves continue to apply and have not materially changed. Elementos also confirms the form and context in which the Competent Person’s findings are presented have not been materially modified from the date of announcement.

S c o p i n g S t u d y R e s u l t s

The scoping studies referred to in this announcement are based on low-level technical and economic assessments, which are insufficient to support the estimation of Ore Reserves, or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the scoping studies will be realised.

Elementos advises that the scoping study results are partly drawn from Inferred Resources. There is a low level of geological confidence associated with these estimates and there is no certainty that further exploration work will result in the conversion of the estimate to an Indicated Mineral Resources or that the production target itself will be realised. The term “mining inventory” is used to describe the Indicated and Inferred Mineral Resource within the mine design.

Whereas an Ore Reserve, as defined by the JORC code (2012 Edition), must be based on a study at pre-feasibility study level or better and must not include Inferred Mineral Resources or Exploration Targets. As such, no Ore Reserve can be stated on the basis of the scoping studies.

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