FireFly Metals Ltd. — Capital/Financing Update 2016

Aug 23, 2016

Head Office Level 3, 100 Pirie Street ADELAIDE SA 5000

ABN: 96 110 336 733

Tel: +61 8 8232 8320 Fax: +61 8 8232 8811 www.monaxmining.com.au

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24 August 2016

Monax to acquire prospective gold project

HIGHLIGHTS

• Term sheet signed for mining lease & exploration tenement at Percyville, Queensland

• Surface samples from mining lease report gold up to 62.5 g/t with an average grade of 10.3 g/t gold from 35 samples

Monax Mining Limited ( Monax or the Company ) is pleased to announce that it has signed a binding term sheet with the owner of Mining Lease (“ML”) 30216 and Exploration Permit Minerals (“EPM”) 25370. Laboratory assay results for 35 samples collected within ML 30216 report gold up to 62.5 g/t gold and silver up to 620 g/t (see Table 1).

Gold mineralisation in the Percyville/Gilberton region is usually hosted within narrow quartz veins in the basement metamorphics or Siluro-Devonian granites. The quartz lode at ML 30216 appears different and may be related to gold mineralisation at nearby Kidston and Agate Creek, which is associated with highlevel igneous activity during the Permo-Carboniferous (see Plate 1).

Based on these highly encouraging sampling results, Monax intends to undertake an induced polarisation survey followed by reverse circulation drilling.

Surface sampling results for EPM 25370 also reported copper up to 21.6% (see Table 2).

Agreement Terms

Monax has an exclusive option to purchase ML 30216 by making the following payments to the project vendors:

• Issue of 4 million shares within 14 days of signing formal transaction documents; and

• Cash payment of $500,000 upon exercise of the option which must occur within 18 months of the signing of the term sheet.

If Monax withdraws from the project within the 18-month period, the Company will have acquired no interest in ML 30216.

Monax also has an exclusive option to purchase EPM 25370 through the issue of an ongoing net smelter royalty of 2% for all mineral sales upon exercise of the option.

For further information, please contact:

Gary Ferris Managing Director Monax Mining Ltd P: 0423 259 488 E: info@monaxmining.com.au

Duncan Gordon

Investor Relations Adelaide Equity Partners Ltd P: 0404 006 444 E: dgordon@adelaideequity.com.au

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr G M Ferris, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Ferris is engaged under a contract to provide services as Managing Director as required and, has a minimum of five years relevant experience in the style of mineralisation and type of deposit under consideration and qualifies as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” Mr Ferris consents to the inclusion of the information in this report in the form and context in which it appears.

Forward Looking Statements

The information in this report includes forward looking statements. Forward looking statements inherently involve subjective judgement and analysis and are subject to significant uncertainties, risks and contingencies, many of which are outside of the control of, and may be unknown to, the Company. Actual results and developments may vary materially from those expressed in these materials. The types of uncertainties which are relevant to the Company may include, but are not limited to, commodity prices, political uncertainty, changes to the regulatory framework which applies to the business of the Company and general economic conditions. Given these uncertainties, readers are cautioned not to place undue reliance on such forward looking statements.

Forward looking statements in these materials speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, the Company does not undertake any obligation to publicly update or revise any of the forward looking statements or any change in events, conditions or circumstances on which any such statement is based.

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Plate 1. Sample of rock from ML 30216

Table 1: Sampling results from ML 30216

Site	Sample	Easting	Northing	Au	Au(R)	Au(S)	Ag	As	Cu	Mo	Pb	S	Te	Zn
5	134938	796943	7887090	2.34	-	-	14.1	68	135	17	203	515	15	21
6	134939	796917	7887098	28.6	26.6	-	370	30	25	59	4640	3610	80	25
7	134940	796950	7887078	4.75	4.61	-	42.8	5	24	159	1530	7050	15	X
8	134941	796939	7887074	7.82	-	-	11.7	6	12	125	522	3120	X	X
9	134942	796941	7887072	0.93	0.76	0.97	11	X	7	84	1100	3870	X	6
10	134943	796937	7887068	1.24	-	-	14	X	9	13	134	9160	X	6
11	134944	796930	7887065	1.39	-	-	18.1	7	35	558	255	7030	X	10
12	134945	796920	7887059	1.37	-	-	72	3	8	269	3570	13400	15	X
13	134946	796923	7887055	6.47	-	-	69.4	11	148	36	131	19100	20	15
13	134947	796923	7887055	6.12	-	-	70.9	5	14	391	260	10900	30	7
14	134948	796918	7887057	12.8	-	-	159	5	21	35	60	8980	25	6
15	134949	796920	7887057	3.29	-	-	34.3	4	11	17	97	17900	15	8
16	134950	796912	7887052	5.01	-	-	56.8	6	11	209	217	11200	20	8
17	134951	796908	7887051	2.58	-	-	30	X	7	36	1640	3620	X	6
18	134952	796908	7887048	9.85	-	-	85.2	5	29	27	386	12600	25	9
20	134953	796895	7887039	11.1	-	-	102	X	21	178	2120	7210	15	5
21	134954	796904	7887047	6.85	-	-	58.7	4	8	73	217	11800	10	6
22	134955	796891	7887037	7.38	-	-	78.4	3	47	14	974	5240	20	9
23	134956	796843	7886867	0.1	-	-	5.6	113	313	16	33	195	X	21
24	134957	796813	7886909	6.49	-	-	52.6	9	1140	120	504	16000	15	9
25	134958	796817	7886916	18.3	-	-	162	5	331	68	1150	21200	30	7
26	134959	796818	7886915	1.11	-	-	19.3	X	61	199	492	9080	X	8
27	134960	796823	7886921	62.5	62.4	-	620	15	149	28	123	975	155	43
28	134961	796836	7886927	18.5	-	-	180	26	31	30	262	3030	35	19
29	134962	796839	7886929	2.63	-	2.62	25	5	12	69	1180	9680	X	9
30	134963	796840	7886929	5.37	-	-	108	7	66	71	2440	9730	15	9
31	134964	796835	7886937	3.13	-	-	48.5	7	37	41	95	7070	X	11
32	134965	796839	7886937	13.7	-	-	132	15	105	276	1680	11500	25	12
33	134966	796845	7886937	38.1	-	-	450	5	45	49	3900	15900	65	10
34	134967	796845	7886942	8.25	-	-	71.2	X	7	64	159	1500	15	X
34	134968	796845	7886942	36.3	-	-	360	5	48	136	438	12800	35	X
35	134969	796849	7886943	13	-	-	92.8	5	22	47	63	7980	15	12
36	134970	796858	7886942	2.42	-	-	20.1	X	11	24	297	11300	X	6
37	134971	796856	7886951	3.16	-	-	30.4	X	6	42	53	5310	X	X
38	134972	796853	7886989	7.28	-	-	54.8	X	30	57	2050	8130	30	12

Table 2: Sampling results from EPM 25370

Site	Sample	Easting	Northing	Au	Au(R)	Ag	As	Cu	Mo	Pb	S	Te	Zn	Cu (%)
40	134973	799647	7897008	0.7	-	12.5	43	>10000	10	242	1080	X	1110	6.28
41	134974	799650	7897017	0.74	-	X	41	>10000	83	24	1250	10	278	21.6
42	134975	799700	7896978	0.11	-	X	536	7780	438	22	1070	10	738	-
43	134976	799760	7897012	0.07	-	1	1800	1920	154	323	885	X	301	-
44	134977	800295	7897451	0.44	-	61.9	39	>10000	19	197	235	X	795	16.4
45	134978	800328	7897446	0.79	-	14.3	12	>10000	18	264	445	X	1020	7.48
46	134979	800314	7897490	X	-	X	39	336	282	15	990	20	45	-
47	134980	800291	7897468	0.94	-	5.2	119	4170	45	124	1400	10	310	-
48	134981	799391	7897364	0.03	0.04	X	255	4770	239	178	855	X	106	-
49	134982	799367	7897364	0.05	-	X	190	2760	494	758	1070	X	116	-
49	134983	799367	7897364	0.03	-	1.2	109	90	129	181	390	X	42	-
50	134984	799335	7897357	0.54	0.58	0.9	13	111	11	29	1080	X	12	-
50	134985	799335	7897357	0.05	-	X	30	113	98	12	3270	X	9	-
50	134986	799335	7897357	0.02	-	X	7	124	420	13	10900	X	7	-

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Location of Percyville Project (ML 30216 & EPM 25370)

JORC Code, 2012 Edition – Table 1 report template

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Criteria		JORC Code explanation	JORC Code explanation	Commentary	Commentary
Sampling		•	Nature and quality of sampling (eg cut channels, random chips, or	•	Samples of quartz breccia was collected from outcrops within ML
techniques			specific specialised industry standard measurement tools appropriate		30216.
			to the minerals under investigation, such as down hole gamma	•	The samples are not considered as being highly representative.
			sondes, or handheld XRF instruments, etc). These examples should	•	There has been insufficient exploration to define a Mineral Resource
			not be taken as limiting the broad meaning of sampling.		and it is uncertain if further exploration will result in the determination
		•	Include reference to measures taken to ensure sample representivity		of a Mineral Resource.
			and the appropriate calibration of any measurement tools or systems
			used.
		•	Aspects of the determination of mineralisation that are Material to the
			Public Report.
		•	In cases where ‘industry standard’ work has been done this would be
			relatively simple (eg ‘reverse circulation drilling was used to obtain 1
			m samples from which 3 kg was pulverised to produce a 30 g charge
			for fire assay’). In other cases more explanation may be required,
			such as where there is coarse gold that has inherent sampling
			problems. Unusual commodities or mineralisation types (eg
			submarine nodules) may warrant disclosure of detailed information.
Drilling		•	Drill type (eg core, reverse circulation, open-hole hammer, rotary air	•	Not Applicable – no drilling results reported.
techniques			blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple
			or standard tube, depth of diamond tails, face-sampling bit or other
			_type, whether core is oriented and if so, by what method, etc). _
Drill	sample	•	Method of recording and assessing core and chip sample recoveries	•	Not Applicable – no drilling results reported.
recovery			and results assessed.
		•	Measures taken to maximise sample recovery and ensure
			representative nature of the samples.
		•	Whether a relationship exists between sample recovery and grade
			and whether sample bias may have occurred due to preferential
			loss/gain of fine/coarse material.
Logging		•	Whether core and chip samples have been geologically and	•	Not Applicable – no drilling results reported.
			geotechnically logged to a level of detail to support appropriate
			Mineral Resource estimation, mining studies and metallurgical
			studies.
		•	Whether logging is qualitative or quantitative in nature. Core (or
			costean, channel, etc) photography.
		•	The total length andpercentage of the relevant intersections logged.
Sub-sampling		•	If core, whether cut or sawn and whether quarter, half or all core	•	No sample preparation was completed on samples collected in the
techniques and			taken.		field. Samples were crushed andpulverised at the laboratoryfor

Criteria	Criteria		JORC Code explanation	JORC Code explanation	Commentary	Commentary
sample			•	If non-core, whether riffled, tube sampled, rotary split, etc and		analysis
preparation				whether sampled wet or dry.	•	The sample size is considered appropriate for reconnaissance
			•	For all sample types, the nature, quality and appropriateness of the	sampling for gold.
				sample preparation technique.
			•	Quality control procedures adopted for all sub-sampling stages to
				maximise representivity of samples.
			•	Measures taken to ensure that the sampling is representative of the in
				situ material collected, including for instance results for field
				duplicate/second-half sampling.
			•	Whether sample sizes are appropriate to the grain size of the material
				being sampled.
Quality		of	•	The nature, quality and appropriateness of the assaying and	•	Rock chips were assayed in a commercial laboratory	using standard
assay data		and		laboratory procedures used and whether the technique is considered		methods for gold.
laboratory				partial or total.	•	Gold was determined by fire assay (FAA505). All other elements
tests			•	For geophysical tools, spectrometers, handheld XRF instruments, etc,		were analysed using a multi-acid digest followed by	an inductively
				the parameters used in determining the analysis including instrument		coupled plasma atomic emission spectroscopy (ICP-AES). All
				make and model, reading times, calibrations factors applied and their		samples were analysed at SGS Laboratory Townsville.
				derivation, etc.
			•	Nature of quality control procedures adopted (eg standards, blanks,
				duplicates, external laboratory checks) and whether acceptable levels	•	Lab standards were assayed as part of this job.
				of accuracy (ie lack of bias) and precision have been established.
Verification		of	•	The verification of significant intersections by either independent or	•	Not Applicable – no drilling results reported.
sampling		and		alternative company personnel.
assaying			•	The use of twinned holes.
			•	Documentation of primary data, data entry procedures, data
				verification, data storage (physical and electronic) protocols.
			•	Discuss any adjustment to assay data.
Location		of	•	Accuracy and quality of surveys used to locate drill holes (collar and	•	Rock chip sample locations were collected using a hand held GPS
data	points			down-hole surveys), trenches, mine workings and other locations		(+/- 5m accuracy).
				used in Mineral Resource estimation.	•	MGA94 (Zone 54)
			•	Specification of the grid system used.
			•	Quality and adequacy of topographic control.
Data	spacing		•	Data spacing for reporting of Exploration Results.	•	The data is not appropriate for use in estimating a Mineral Resource
and			•	Whether the data spacing and distribution is sufficient to establish the		and is not intended for such use. There has been insufficient
distribution				degree of geological and grade continuity appropriate for the Mineral		exploration to define a Mineral Resource and it is uncertain if further
				Resource and Ore Reserve estimation procedure(s) and		exploration will result in the determination of a Mineral Resource.
				classifications applied.
			•	Whether sample compositing has been applied.	•	No sample compositing was undertaken.
Orientation		of	•	Whether the orientation of sampling achieves unbiased sampling of	•	The samples were collected at a selected site and it is	unknown if this
data	in relation			possible structures and the extent to which this is known, considering		results is biased or unbiased.
to	geological			the deposit type.

Criteria		JORC Code explanation	JORC Code explanation	Commentary	Commentary
structure		•	If the relationship between the drilling orientation and the orientation
			of key mineralised structures is considered to have introduced a
			sampling bias, this should be assessed and reported if material.
Sample		•	The measures taken to ensure sample security.	•	Unknown.
security
Audits	or	•	The results of any audits or reviews of sampling techniques and data.	•	No audits or reviews have been completed.
reviews

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria JORC Code explanation	Commentary	Commentary	Commentary	Commentary
Mineral tenement and land tenure status • Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings. • The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.	• The area sampled is located on ML 30216 and EPM 25370 held by private individuals. Monax has signed a binding term sheet with the owners and is the process of producing a option to purchase agreement. • The ML and EPM are free of any known impediments.
Exploration done by other parties • 2006	• Previous company exploration within the Percyville area has mainly focussed on gold with some exploration for base metals and uranium. • Several companies have explored for uranium on the tenement - not included here. Below is a short summary of exploration undertaken in the area of EPM 25370. Year Company Target- work Reference 1986 MtVeteran Minerals Basemetals–streamsed CR 16252 1988 Central Murchison Gold Gold – detailed work at Camerons prospect CR 18183 1989 BattleMountain Gold–steremsed CR 21076 1991, 1992 Kidston Gold Mines Gold – geol mapping, rock chip sampling CR 22850, CR 23772 1993 BHP Base metals – rock chip sampling;RC drilling CR 24755 1994 BHP Base metals – airborne EM and ground surveys; rock chip sampling CR 25908 1995 BHP Drilling CR 26853 1994 Rio Tinto Base metals - follow-up BHP work – stream sed; rock chip sampling CR 44079 2009 Glengarry Resources Gold & base metals – mapping, soil sampling, rock chip sampling, channel sampling and drilling CR 57432
	Year	Company	Target- work	Reference
	1986	MtVeteran Minerals	Basemetals–streamsed	CR 16252
	1988	Central Murchison Gold	Gold – detailed work at Camerons prospect	CR 18183
	1989	BattleMountain	Gold–steremsed	CR 21076
	1991, 1992	Kidston Gold Mines	Gold – geol mapping, rock chip sampling	CR 22850, CR 23772
	1993	BHP	Base metals – rock chip sampling;RC drilling	CR 24755
	1994	BHP	Base metals – airborne EM and ground surveys; rock chip sampling	CR 25908
	1995	BHP	Drilling	CR 26853
	1994	Rio Tinto	Base metals - follow-up BHP work – stream sed; rock chip sampling	CR 44079
	2009	Glengarry Resources	Gold & base metals – mapping, soil sampling, rock chip sampling, channel sampling and drilling	CR 57432
Geology • Deposit type, geological setting and style of mineralisation.	• Quartz hosted gold.
Drill hole • A summary of all information material to the understanding of the	• Not Applicable – no drillingresults reported.

Criteria		JORC Code explanation	JORC Code explanation	Commentary	Commentary
Information			exploration results including a tabulation of the following information	.
			for all Material drill holes:
			o easting and northing of the drill hole collar
			o elevation or RL (Reduced Level – elevation above sea level in
			metres) of the drill hole collar
			o dip and azimuth of the hole
			o down hole length and interception depth
			o hole length.
		•	If the exclusion of this information is justified on the basis that the
			information is not Material and this exclusion does not detract from
			the understanding of the report, the Competent Person should clearly
			explain why this is the case.
Data		•	In reporting Exploration Results, weighting averaging techniques,
aggregation methods			maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.	•	Not Applicable – no drilling results reported.
		•	Where aggregate intercepts incorporate short lengths of high grade
			results and longer lengths of low grade results, the procedure used
			for such aggregation should be stated and some typical examples of
			such aggregations should be shown in detail.
		•	The assumptions used for any reporting of metal equivalent values
			should be clearly stated.
Relationship		•	These relationships are particularly important in the reporting of	•	Not Applicable – no drilling results reported.
between			Exploration Results.
mineralisation		•	If the geometry of the mineralisation with respect to the drill hole
widths	and		angle is known, its nature should be reported.
intercept		•	If it is not known and only the down hole lengths are reported, there
lengths			should be a clear statement to this effect (eg ‘down hole length, true
			_width not known’). _
Diagrams		•	Appropriate maps and sections (with scales) and tabulations of	•	Map showing tenement location is included in Release and results
			intercepts should be included for any significant discovery being		are presented in Table format within the Release.
			reported These should include, but not be limited to a plan view of
			drill hole collar locations and appropriate sectional views.
Balanced		•	Where comprehensive reporting of all Exploration Results is not	•	Results for samples are included in release.
reporting			practicable, representative reporting of both low and high grades
			and/or widths should be practiced to avoid misleading reporting of
			Exploration Results.
Other		•	Other exploration data, if meaningful and material, should be reported	•	No applicable – no history of exploration has been found for the area
substantive			including (but not limited to): geological observations; geophysical		within ML 30216. A brief summary of regional exploration relating to
exploration			survey results; geochemical survey results; bulk samples – size and		EPM 25370 is included above.
data			method of treatment; metallurgical test results; bulk density,
			groundwater, geotechnical and rock characteristics; potential
			deleterious or contaminating substances.

Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Further work	•	The nature and scale of planned further work (eg tests for lateral	•	Monax is planning to undertake an IP survey on ML 30216 followed
		extensions or depth extensions or large-scale step-out drilling).		by drilling. Monax is planning data compilation followed by further
	•	Diagrams clearly highlighting the areas of possible extensions,		mapping and sampling on EPM 25370.
		including the main geological interpretations and future drilling areas,
		provided this information is not commercially sensitive.