FireFly Metals Ltd. — Capital/Financing Update 2016

May 16, 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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17 May 2016

Monax to acquire prospective Lithium project

HIGHLIGHTS

• Binding term sheet signed for prospective lithium tenement near Gingerella in northern Queensland

• Rock chip sample reports 3.55% Li2O from lepidolite pegmatite

• Application for adjoining tenement completed

Monax Mining Limited ( Monax or the Company ) is pleased to announce that it signed a binding term sheet with the owner of EPM 26053 which contains a reported occurrence of lithium bearing lepidolite pegmatite ( see Figure 1). Laboratory assay results of a lepidolite-rich sample taken from the tenement reported 3.55% Li2O (see Plate 1).

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Plate 1: Sample of lepidolite pegmatite which assayed 3.55% Li2O.

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Additionally, Monax has applied for a tenement which adjoins EPM 26053 (see Figure 1) on the basis that it contains the prospective Blackman Gap Complex, a geological unit which hosts lepidolite pegmatite. Monax plans to apply for further tenements in the immediate area.

Transaction Overview

Under the terms of the agreement, Monax will have the right to earn an 80% interest in EPM 26053 by spending A$500,000 on exploration activities within 18 months of the date of execution of the transaction documents.

At the completion of the farm-in period, the vendor can elect to do either of the following:

• sell a 20% interest to Monax for an agreed amount or, if no agreement is reached between the parties, for fair market value as determined by an independent expert; or

• sell a 20% interest to a third party but not before offering Monax the option to purchase the interest at a value equal to the highest offer by a third party; or

• enter into an unincorporated JV with Monax until a decision to mine ( DTM ).

Upon a DTM, the vendor has the option to co-fund expenditure based on a respective 20% interest or convert the interest to an ongoing net smelter royalty ( NSR ) of 1.5% for all mineral sales derived from the tenement.

For further information, please do not hesitate to contact:

Gary Ferris Duncan Gordon Managing Director Investor Relations Monax Mining Ltd Adelaide Equity Partners Ltd P: 0423 259 488 P: 0404 006 444 E: info@monaxmining.com.au E: dgordon@adelaideequity.com.au

Site	Easting	Northing	Li2O (%)	Ta (ppm)	Cs (ppm)	Rb (%)
Gingerella	252747	8039644	3.55	125.5	2560	1.23

Summary of results for sample from Gingerella (further information contained in Table 1).

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 employed full time by the Company as Managing Director 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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Figure 1: EPM 26176 and EPM 26053 are located approximately 40km WSW of Mount Garnet, Queensland
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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		Sample of lepidolite pegmatite was collected from an outcrop within
techniques			specific specialised industry standard measurement tools appropriate		EPM 26053.
			to the minerals under investigation, such as down hole gamma		The sample is 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 ifso, 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/gainof 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 and percentage 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 sample collected in the
techniques and			taken.		field. Samples were crushed and pulverised at the laboratory for
sample			If non-core, whether riffled, tube sampled, rotary split, etc and		analysis

Criteria	Criteria		JORC Code explanation	JORC Code explanation	Commentary	Commentary
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 of pegmatites for lithium.
				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 chip was assayed in a commercial laboratory using standard
assay data		and		laboratory procedures used and whether the technique is considered		methods for lithium.
laboratory				partial or total.		Lithium was determined by peroxide fusion with	final analysis by
tests				For geophysical tools, spectrometers, handheld XRF instruments, etc,		inductively coupled atomic emission spectroscopy (ICP-AES). Ta
				the parameters used in determining the analysis including instrument		and Cs were assayed using Me-MS81 which is a lithium borate fusion
				make and model, reading times, calibrations factors applied and their		finished with ICP-MS (Inductively coupled	plasma mass
				derivation, etc.		spectrometry). Rb was assayed by Me-XRF15b –	which is a fusion
				Nature of quality control procedures adopted (eg standards, blanks,		XRF technique. Sample was assayed at ALS Minerals laboratory
				duplicates, external laboratory checks) and whether acceptable levels		Brisbane.
				of accuracy (ie lack of bias) and precision have been established.		Lab standards were assayed as part of this job.
Verification		of		The verification of significant intersections by either independent or		Not Applicable – no drilling results reported.
sampling		and		alternative company personnel.		Lithium results have been adjusted – original results reported for Li
assaying				The use of twinned holes.		only – these were converted to Li2O using standard industry formula
				Documentation of primary data, data entry procedures, data		(Li x 2.153).
				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 55)
				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 sample was collected at a selected site and it	is unknown if this

Criteria		JORC Code explanation	JORC Code explanation	Commentary	Commentary
data in relation			possible structures and the extent to which this is known, considering		results is biased or unbiased.
to geological			the deposit type.
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	JORC Code explanation	Commentary	Commentary
Mineral			Type, reference name/number, location and ownership including		The area sampled is located on EPM 26053 held by a private
tenement	and		agreements or material issues with third parties such as joint		individual. Monax has signed a binding term sheet with the EPM
land	tenure		ventures, partnerships, overriding royalties, native title interests,		owner and is the process of producing a farm-in agreement.
status			historical sites, wilderness or national park and environmental
			settings.		The EPM is free of any known impediments.
			The security of the tenure held at the time of reporting along with any
			_known impediments to obtaining a licence to operate inthe area. _
Exploration			Acknowledgment and appraisal of exploration by other parties.		No historical exploration for lithium has been found. Previous
done by	other				company exploration has mainly focussed on gold and tin.
parties
Geology			Deposit type, geological setting and style of mineralisation.		Pegmatite hosted lithium
Drill	hole		A summary of all information material to the understanding of the		Not Applicable – no drilling results reported.
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

Criteria		JORC Code explanation	JORC Code explanation	Commentary	Commentary
			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		Result for sample are included in release. Only one sample was
reporting			practicable, representative reporting of both low and high grades		collected.
			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 lithium exploration in the area
substantive			including (but not limited to): geological observations; geophysical
exploration			survey results; geochemical survey results; bulk samples – size and
data			method of treatment; metallurgical test results; bulk density,
			groundwater, geotechnical and rock characteristics; potential
			_deleterious or contaminating substances. _
Further work			The nature and scale of planned further work (eg tests for lateral		Monax is planning to undertake mapping and sampling within the
			extensions or depth extensions or large-scale step-out drilling).		area.
			Diagrams clearly highlighting the areas of possible extensions,
			including the main geological interpretations and future drilling areas,
			_provided this information is not commercially sensitive. _