ELEMENTOS LIMITED — Interim / Quarterly Report 2018

Jan 30, 2018

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31 January 2018

DECEMBER 2017 QUARTERLY REPORT

HIGHLIGHTS:

• Diamond Drilling Programme Progressing on the Cleveland Project

• LME Tin Price of US$22,000/t

Elementos Limited (ASX: ELT) (“Elementos” or the “Company”) is pleased to report on activities during the December 2017 quarter, including actively progressing the Cleveland tin, copper and tungsten project in Tasmania towards development. The Company has commenced an exploration diamond drilling programme targeting an increase in the shallow open cut resources. The Company’s objective is to lower investment risk and move quickly towards production and cash flow, through a low-capital, staged development strategy, commencing with open cut production, with the lowest possible dilution of shareholders.

CLEVELAND PROJECT UPDATE

E x p l o r a t i o n D r i l l i n g

The Company is pleased to announce that the diamond drilling programme within the Cleveland project in northwest Tasmania is progressing well. The recent exploration activities, which include mapping, sampling, geophysics and drilling are the first modern exploration activities undertaken at Cleveland since 1986. The Company is now establishing a more comprehensive understanding of the geology and mineralisation at Cleveland. The exploration programme is focused on defining and testing new targets and infill, strike and depth extensions to the current 800,000 tonnes at 0.81% Tin and 0.27% Copper open-pit

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Figure 1. Project Location

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Indicated Mineral Resource estimate (ASX announcement 03 March 2015). Some delays have been experienced due to bad weather, which have on occasion made vehicle access to the site and drilling operations unsafe.

At the time of reporting, fifteen drill holes had been completed. Analytical results from the first nine drill holes included two significant intersections which have the potential to extend the open-cut mineral resource on two of the main tincopper lode systems defined at Cleveland.

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Figure 2. LIDDS drilling at Cleveland

Significant downhole intersections are:

• Drill hole C2102 (Henry’s Lode) - 3.9m @ 0.49% Sn* and 0.15% Cu from 32.1 metres

• Drill hole C2104 (Khaki Lode) - 3.9m @ 0.78% Sn and 0.25% Cu from 67.1 metres

• Drill hole C2106 (Hall’s Lode) - 1m @ 0.59% Sn & 0.72% Cu from 44.5m and 0.5m @ 0.49% Sn from 59.5 metres

• Drill hole C2107 (Henry’s Lode) - 2m @0.61% Sn & 0.34% Cu from 74.2 metres

• Drill hole C2108 (Battery’s Lode) - 8m @ 0.05% Sn from 57 metres (Cu analyses pending)

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Figure 3. Drill hole C2104 – mineralised zone

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Figure 4. Cross Section of Drill Hole C2104

The drill core is transferred to a processing facility in Waratah where the core is geologically and geotechnically logged prior to sampling using a diamond saw. The samples are then transported to the ALS laboratories in Burnie for analysis.

Twelve of the drill holes completed to-date have targeted infill, depth and along strike extensions to the known near surface mineralisation at Cleveland. Three drill holes have been targeted at one of the ground magnetic targets identified by Elementos early in 2017.

HOLE_ID	GDA94E	**GDA94N **	Azimith__True	Azimuth__Mag	Dip	**Total_Depth(m) **	Target
C2100	365290	5407110	312	300	‐35	68.9	Henry's
C2101	365270	5407097	312	300	‐30	89.7	Henry's
C2102	365045	5406944	312	300	‐15	67.9	Khaki's
C2103	365002	5406901	312	300	‐15	47.8	Khaki's
C2104	364974	5406855	312	300	‐40	107.7	Khaki's
C2105	364974	5406855	312	300	‐5	104.4	Khaki's
C2106	365161	5406894	312	300	‐30	60.0	Hall's
C2107	365226	5407048	312	300	‐30	101.2	Henry's
C2108	365187	5406798	312	300	‐45	84.5	Battery's
C2109	365165	5406759	312	300	‐55	97.4	Battery's
C2110	365679	5407217	015	003	‐5	79.9	Mainsectionof Anomaly One
C2111	365625	5407193	320	308	‐25	68.3	Westernsectionof Anomaly One
C2112	365655	5407200	010	358	‐30	80.5	Main section of AnomalyOne
C2113	365452	5407193	330	318	‐5	98.3	Extension of Henry's and Khaki Lode
C2114	365348	5407242	150	138	‐55	152.6	Extension of Khaki's and Henry's Lode
*drill hole collars not surveyed

Table 1. Drill holes completed at the time of reporting

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Figure 5. Cleveland diamond drill hole location plan

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Figure 6. TMI Image (1VD over 2VD RTP) depicting the location of the drill targets

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The diamond drilling programme is expected to be completed in the first quarter of 2018. Upon completion, the geological and open cut resources will be re-assessed utilising the latest data from the exploration programme.

E x p l o r a t i o n T e n e m e n t s

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

Tenement Name	Tenement Number	Area(km²)	Elementos Interest	Tenement Location
Cleveland	EL7/2005	55	100%	Tasmania

No new tenements were acquired during the quarter

CORPORATE

LME Tin Price

At the time of writing, the LME tin price has risen by 12% since mid-November 2017. The LME tin price at the time of writing was US$22,000/t.

O t h e r

The Company is actively pursuing additional business development opportunities, particularly in tin. The current global forecast for refined tin is to be in shortfall by approximately 40,000t by 2020.

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

For more information, please contact:

Duncan Cornish

Company Secretary Phone: +61 7 3212 6299

Email: admin@elementos.com Please visit us at: www.elementos.com.au

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C A U T I O N A R Y S T A T E M E N T S

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 following announcements:

• “Cleveland Tailings Ore Reserve” released on the 3 August 2015;

• “Cleveland JORC Resource Significantly Expanded” announced to the ASX on 5 March 2014; and

• “Cleveland Open Pit - High-Grade Mineral Resource Defined” announced on 3 March 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.

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MINERAL RESOURCES AND ORE RESERVES

Open Pit Tin‐Copper Mineral Resource (at 0.35% Sn cut‐off) NOTE: this Open Pit Tin‐Copper Mineral Resource is a sub‐set of the Total Tin‐Copper Mineral Resource noted below	Open Pit Tin‐Copper Mineral Resource (at 0.35% Sn cut‐off) NOTE: this Open Pit Tin‐Copper Mineral Resource is a sub‐set of the Total Tin‐Copper Mineral Resource noted below	Open Pit Tin‐Copper Mineral Resource (at 0.35% Sn cut‐off) NOTE: this Open Pit Tin‐Copper Mineral Resource is a sub‐set of the Total Tin‐Copper Mineral Resource noted below	Open Pit Tin‐Copper Mineral Resource (at 0.35% Sn cut‐off) NOTE: this Open Pit Tin‐Copper Mineral Resource is a sub‐set of the Total Tin‐Copper Mineral Resource noted below	Open Pit Tin‐Copper Mineral Resource (at 0.35% Sn cut‐off) NOTE: this Open Pit Tin‐Copper Mineral Resource is a sub‐set of the Total Tin‐Copper Mineral Resource noted below	Open Pit Tin‐Copper Mineral Resource (at 0.35% Sn cut‐off) NOTE: this Open Pit Tin‐Copper Mineral Resource is a sub‐set of the Total Tin‐Copper Mineral Resource noted below
Category	Tonnage	Sn Grade	Contained Sn	Cu Grade	Contained Cu
Indicated	0.80 Mt	0.81%	6,500t	0.27	2,300t
Inferred	0.01 Mt	0.99%	140t	0.34	50t

Table subject to rounding errors; Sn = tin, Cu = copper	Table subject to rounding errors; Sn = tin, Cu = copper	Table subject to rounding errors; Sn = tin, Cu = copper	Table subject to rounding errors; Sn = tin, Cu = copper	Table subject to rounding errors; Sn = tin, Cu = copper	Table subject to rounding errors; Sn = tin, Cu = copper	Table subject to rounding errors; Sn = tin, Cu = copper
Total Tin‐Copper Mineral Resource(at 0.35% Sn cut‐off)
Category	Tonnage		Sn Grade	Contained Sn	Cu Grade	Contained Cu
Indicated	5.00 Mt		0.69%	34,500t	0.28%	14,000t
Inferred	2.44 Mt		0.56%	13,700t	0.19%	4,600t
Table subject to rounding errors; Sn = tin, Cu = copper
Tailings Ore Reserve(at 0% Sn cut‐off)
Category	Tonnage		Sn Grade	Contained Sn	Cu Grade	Contained Cu
Probable	3.7 Mt		0.29%	11,000t	0.13%	5,000t
Table subject to rounding errors; Sn=tin, Cu=copper
Underground Tungsten Mineral Resource(at 0.20% WO3 cut‐off)
Category		Tonnage		WO3 Grade
Inferred		4 Mt		0.30%

Table subject to rounding errors; WO3 = tungsten oxide

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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