FENIX RESOURCES LTD — Interim / Quarterly Report 2018

Jan 30, 2019

31 January 2019

QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 31 DECEMBER 2018

Highlights

• $4.5 million Prospectus offer successfully completed

• 3,534m of reverse circulation and 1,210m of diamond drilling completed at the Iron Ridge Project

• High-Grade Iron Ore assays received at the Iron Ridge Project including:

• 70m @ 64.8% Fe from 72m in hole IR011

• 66m @ 66.2% Fe from 80m in hole IR015

• 58m @ 66.7% Fe from 84m in hole IR018

• 52m @ 66.2% Fe from 130m in hole IR035

• 56m @ 63.6% Fe from 54m in hole IR017

• 50m @ 66.6% Fe from 152m in hole IR016

• 40m @ 65.6% Fe from 164m in hole IR012

• 20m @ 65.9% Fe from 70m in hole IR022

• 46m @ 66.3% Fe from 206m in hole IR036

• 26m @ 65.6% Fe from 74m in hole IR046

• Numerous high-grade Fe intercepts accompanied by low impurity levels including SiO2, Al2O3 & P

• Assay results from all diamond drilling remain pending (approximately 300 samples of HQ core)

• Metallurgical testwork, including a determination of lump to fines ratio, due to commence on Diamond Core in the coming weeks

Western Australian developer and explorer Fenix Resources Limited ( Company ) is pleased to report on its activities for the December 2018 quarter.

Maiden Drill Program at Iron Ridge Project Commenced

During the quarter Fenix received all necessary approvals to commence a combined diamond and RC drill program at its flagship Iron Ridge Project in the Mid-west region of Western Australia. The drill program was designed to test the depth and strike extent of the existing Inferred Resource of 5.0Mt at 64.1% Fe[1] , as well as increase the confidence level of the Resource to Indicated category.

1 See ASX:FEX announcement dated 07/05/2018: Acquisition of High Grade DSO Hematite Iron Project

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CSA Global Pty Ltd (CSA Global) had previously prepared documentation to allow the Mineral Resource to be reported in accordance to the JORC Code (2012 Edition)[1] status and subsequently completed an Exploration Target of 0.6Mt to 7.1Mt of predominantly hematite mineralisation in a grade range of between 64.1% Fe and 65.3% with low deleterious elements, and a further 0.1Mt to 5.7Mt of goethite mineralisation grading 58% to 59.5% Fe with slightly elevated deleterious elements (Refer ASX announcement of 7 May 2018).

Please note that the potential quantity and grade of this Exploration Target is conceptual in nature, there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource. The exploration target is based on historical exploration results as well as a field visit conducted by CSA Global in 2018.

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Figure 1: Drill Hole Location Plan

A reduced number of RC metres were drilled than originally planned as the anticipated north-eastern strike extensions did not eventuate, however additional RC metres were drilled to the west as extensions to the mineralised zone were identified. Additionally, some holes had to be abandoned prematurely due to drilling difficulties arising from water ingress and trouble air lifting the high-density hematite intersected in some of the deeper holes.

Subsequent to the quarter, the Company advised it had received all the assay results from the 21 RC holes drilled in two batches (the first batch of results was announced 17 January and the second batch on 23 January 2019).

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These latest results detailed in Table 1 , illustrate the consistent high grades in the Main BIF unit with nine separate intercepts of between 20m and 70m grading >64.8% Fe.

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Figure 2: Section through drill holes IR011, IR012 and IR013

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Figure 3: Section through drill holes IR015 and IR016

The Company now awaits assay results for all of the diamond core samples. The 8 diamond holes and one diamond tail targeted the same mineralisation as the RC holes with the core also intended to be used for metallurgical and geotechnical testwork.

In addition, Fenix expects the results from the metallurgical testwork to be available in February and a new Mineral Resource to be completed in March 2019

$4.5 Million Prospectus Offer Closed

During the period the Company advised that the offers made under the Company’s Prospectus dated 5 September 2018 successfully closed on 2 November 2018.

Following the close of the Prospectus offers, Non-Executive Directors Edmond Yao and Jian-Hua Sang resigned as Directors of the Company. The Company thanks Edmond and Jian-Hua for their contribution to the Company during their tenure.

Following completion of the Prospectus Offer and satisfaction of compliance with the ASX Listing Rules, Fenix’s shares were reinstated to trading on 30 November 2018.

Following completion of the Prospectus Offer the Company confirmed that Mr Garry Plowright had been appointed to the Board of Fenix as Executive Director. The Company further advised that Mr Robert Brierley was now an Executive Director of Fenix.

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The updated capital structure of the Company following completion of the Public Offer is set out below:

Ordinary Shares	Securities
Shares on issue as at date of Prospectus	45,398,133
Shares issued pursuant to the Public Offer	112,500,000
Shares issued pursuant to Vendor Offer	25,000,000
Shares issuedpursuant to Convertible Note Offer	30,000,000
Total Fully Paid Ordinary Shares	212,898,133
Options Exercisable at $0.08 on or before 21 November 2021	59,000,000
Total Options	59,000,000
Class A Performance Shares	15,000,000
Class B Performance Shares	30,000,000
Class C Performance Shares	37,500,000
Class D Performance Shares	30,000,000
Total Performance Shares	112,500,000

On Behalf of Fenix Resources Limited:

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Rob Brierley

Executive Director Fenix Resources Limited

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Table 1: Iron Ridge Project Assay Results

Drill Hole ID	Tenement	Hole Type	Results Status	Unit
IR001	M20/118	Diamond	Results Pending
IR002	M20/118	Diamond	Results Pending
IR003	M20/118	Diamond	Results Pending
IR004	M20/118	Diamond	Results Pending
IR005	M20/118	Diamond	Results Pending
IR007	M20/118	Diamond	Results Pending
IR009	M20/118	RC	4m@58.13% Fe from 6m	Little BIF
And			4m@62.73% Fe from 54m	Main BIF
IR011	M20/118	RC	70m@ 64.8% Fe from 72m	Main BIF
IR012	M20/118	RC	14m@57.0% Fe from 56m	Little BIF
	And		40m@ 65.6% Fe from 164m	Main BIF
IR013	M20/118	RC	20m@57.7% Fe from 122m	Little BIF
IR014	M20/118	RC	16m@58.7% Fe from 108m	Little BIF
IR015	M20/118	RC	66m@ 66.2% Fe from 80m	Main BIF
IR016	M20/118	RC	18m@60.0% Fe from 48m	Little BIF
	And		50m@ 66.6% Fe from 152m	Main BIF
IR017	M20/118	RC	27m@63.6% Fe from 56m	Main BIF
IR018	M20/118	RC	58m@ 66.7% Fe from 84m	Main BIF
IR019	M20/118	RC	8m@61.8% Fe from 86m	Little BIF
And			4m@62.8% Fe from 160m	Main BIF
IR020	M20/118	Diamond	Results Pending
IR021	M20/118	RC	16m@62.4% Fe from 78m	Little BIF
And			8m@66.4% Fe from 130m	Main BIF
IR022	M20/118	RC	20m@ 65.9% Fe from 70m	Main BIF
IR023	M20/118	RC	4m@61.4% Fe from 34m	Little BIF
	And		4m@62.5% Fe from 90m	Main BIF
IR024	M20/118	RC	8m@60.5% Fe from 98m	Little BIF
IR026	M20/118	RC	14m@55.0% Fe from 36m	Little BIF
IR033D	M20/118	RCD	20m@59.6% Fe from 102m	Little BIF
			Results Pendingfrom diamond tail
IR035	M20/118	RC	22m@59.6% Fe from 34m	Little BIF
	And		48m@ 66.2% Fe from 130m	Main BIF
IR036	M20/118	RC	18m@58.2% Fe from 94m	Little BIF
And			46@ 66.3 %Fe from 206m	Main BIF
IR046	M20/118	RC	26m@ 65.6% Fe from 74m	Main BIF
IR047	M20/118	RC	14m@56.9% Fe from 86m	Little BIF
IR048	M20/118	Diamond	Results Pending
IR049	M20/118	RC	6m@63.2% Fe from 76m	Main BIF

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TENEMENT SCHEDULE

The Company’s interests in tenements is as follows:

Location	Project	Tenement No.	Interest
Western Australia	Iron Ridge	M20/118-I	100%
Western Australia	Beyondie	E52/2215	80% interest in Iron Ore, Vanadium and Manganese (20% De Grey Mining Limited)

Competent Persons Statement

The information in this report that relates to Exploration Results, Exploration Targets and Mineral Resources is based on information compiled by Mr James Potter. Mr Potter is a full-time employee of CSA Global Pty Ltd and is a Member of the Australasian Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists. Mr Potter has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as Competent Person as defined in the 2012 edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources, and Ore Reserves (JORC Code). Mr Potter consents to the disclosure of the information in this report in the form and context in which it appears. Additionally, Mr Potter confirms that the entity is not aware of any new information or data that materially affects the information contained in the ASX releases referred to in this report.

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