FireFly Metals Ltd. — Interim / Quarterly Report 2014

Oct 30, 2013

Exploration Office Warehouse I, 5 Butler Blvd Burbridge Business Park Adelaide Airport SA 5950 Postal Address PO Box 247 Export Park SA 5950

ABN: 96 110 336 733

Tel: +61 8 8375 3900 Fax: +61 8 8375 3999 www.monaxmining.com.au

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For immediate release 31 October 2013

Monax Mining Limited Quarterly Report For the quarter ended 30 September 2013

HIGHLIGHTS

• Waddikee Project –

• Maiden JORC Inferred Mineral Resource for Wilclo South received.

• Total combined Inferred Mineral Resource of 6.38 Mt grading 8.8% total graphitic carbon (TGC) with approximately 550,000 tonnes of contained graphite using a 5% cut-off.

• High-grade component of 1.75 Mt grading 12.5% TGC using a 10% cutoff.

• Non-renounceable Rights Issue announced to raise approximately $1.5 million to advance Waddikee Graphite Project.

•

Monax | Antofagasta Strategic Alliance –

• Antofagasta to continue SA focussed Strategic Alliance with Monax for a third year.

• Antofagasta to provide Monax with up to $US400,000 to continue to review potential copper projects within South Australia.

Quarterly report for the period ending 30 September 2013 ~ 1 ~

Corporate

In the three months to 30 September 2013, Monax Mining Limited (ASX:MOX) focussed on assessing the newly defined JORC Inferred Mineral Resource for the Wilclo South graphite deposit, reviewing projects within the Strategic Aliance with Antofagasta and continued to review and plan the next phase of exploration for the Punt Hill project.

The Wilclo South deposit, part of the Company’s Waddikee Graphite Project comprises a total combined Inferred resource of 6.4 million tonnes grading 8.8% TGC for 550,000 tonnes of contained graphite using a 5% cut-off. The resource includes a high grade component of 1.75 Mt grading 12.5% TGC using a 10% TGC cut-off.

On 16 September 2013, Monax announced a non-renouncable Rights Issue to raise approximately $1.5 million (less costs) to further advance the Waddikee Graphite Project. Capital raised will fund graphite characterisation work for Wilclo South to asssist with marketing potential products. Funds will also be directed to further drilling at the Francis graphite prospect.

Monax also sold approximately 11.1 million ordinary shares that it held in ASX-listed uranium and base metals explorer, Marmota Energy Ltd during the Quarter. The decision to sell a portion of its holding in Marmota was undertaken as part of Monax’s capital management program. The funds arising from this sale of shares will be allocated towards advancing its SA projects.

During the quarter, Antofagasta advised Monax that it intends to extend the strategic alliance between the two parties for a further year. Under the terms of the additional year, Antofagasta will provide Monax with up to $US400,000 to continue to review potential copper projects within South Australia.

As at 30 September 2013, Monax had a cash balance of $1.04 million. During the quarter $374,000 was spent on exploration on Monax projects.

Exploration

South Australian projects

Monax has seven South Australian projects (Figure 1).

1. Punt Hill – copper-gold (farm-in with Antofagasta).

2. Monax | Antofagasta Strategic Alliance.

3. Waddikee – graphite, manganese and iron.

4. Phar Lap – copper-gold.

5. Yorke Peninsula – copper-gold (includes Melton JV with Marmota Energy).

6. Western Gawler Craton – nickel-copper.

7. Reedy Lagoon – copper-gold (term sheet signed with FMG Resources Pty Ltd).

Quarterly report for the period ending 30 September 2013 ~ 2 ~

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Figure 1. Location of Monax’s projects.

Quarterly report for the period ending 30 September 2013 ~ 3 ~

Waddikee Project – graphite, manganese and iron (Monax 100%)

On August 26 2013, Monax announced its maiden JORC Inferred Mineral Resource for the Wilclo South graphite deposit.

The Waddikee Project (EL 4662) is located approximately 100 kilometres south-west of Whyalla, on South Australia’s Eyre Peninsula, within an area that is becoming the premier graphite province in SA (Figure 1).

The Wilclo South deposit comprises a total combined Inferred resource of 6.4 million tonnes grading 8.8% TGC for the 550,000 tonnes of contained graphite using a 5% cut-off. The resource includes a high grade component of 1.75 Mt grading 12.5% TGC using a 10% TGC cut-off.

The JORC Resource is based on drilling, completed in April 2013, of 77 Reverse Circulation (RC) holes for 7,307m and two holes completed in 2012 totalling 213m, with analysis of more than 2,500 samples. The location of RC drill holes is shown in Figure 2. Two diamond holes were also used in the resource modelling (diamond holes not shown on Figure 2).

The Resource modelling was undertaken by Adelaide-based AMC Consultants Pty Ltd (AMC) and was based on drill traverses ranging between 50 to 200m apart. Drill holes were spaced along each east-west traverse at a nominal spacing of 25m with minor exceptions due to topographic features. Details for the drilling and resource modelling are presented in ASX Release dated 26 August 2013.

Monax’s Wilclo South resource represents only a minor part of the potential graphitic horizon which is interpreted from airborne electromagnetic (AEM) data. This interpretation is supported by limited drilling at the Francis prospect which also reported high-grade graphite with up to 15m @ 20.7% TGC (WG118 14-29m) and 12m @ 21.9% TGC (WG121 60-72m) previously reported (Note: all lengths are downhole lengths; true width unknown).

The Company has commenced a Rights Issue to raise funds to progress the Waddikee Graphite Project. Funds raised will be allocated to undertake metallurgical testing to characterise graphite from Wilclo South and assist with potential product definition, marketing and seeking off-take partners for the project.

Monax is also to undertake further drilling at the Francis graphite prospect with the aim of defining a further graphite resource.

Quarterly report for the period ending 30 September 2013 ~ 4 ~

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Figure 2. Wilclo South prospect - Location of drill holes showing drill hole traces.

Quarterly report for the period ending 30 September 2013 ~ 5 ~

Monax | Antofagasta Strategic Alliance – copper

During the Quarter, Antofagasta approved the extension of the strategic alliance between the two parties – focused on identifying copper projects in South Australia for development - for a further year.

Under the terms of the additional year, Antofagasta will provide Monax with up to a further $US400,000 to continue to review potential copper projects within South Australia.

(In November 2011, Monax signed a two-year strategic alliance with Antofagasta, under which Antofagasta provided US$1 million to Monax over two years for target-generation and exploration within South Australia).

Alliance Projects

Currently, Monax has three Alliance projects under review (see Figure 1) at:

1. Olympic IOCG

2. Kangaroo Island

3. Tent Hill

Under the terms of the strategic alliance, properties which are identified as a project of interest become a Designated Project (DP). Once a DP has been formed, Antofagasta will have acquired a 51% interest and Monax a 49% interest in the project.

Antofagasta will then have the option to earn an additional 19% of any DP (for a cumulative 70% interest) by spending a further US$4 million within three years. At this stage, Antofagasta will make a cash payment (success fee) to Monax of US$3 million.

Upon Antofagasta vesting its interests at 70% and Monax at 30%, both parties have the right to maintain their interest by contributing to exploration or development costs pro rata or dilute in accordance with a standard dilution formula.

If either party elects to discontinue funding the exploration on a project, the other party (the “Diluted Party”) has the option to continue with the project and dilute the first party using a standard dilution formula. The Diluted Party may elect to start contributing funds to discontinued projects at any time before dilution to below a 10% interest. If either party is diluted below a 10% interest, they will revert to a net smelter royalty (NSR) of 1.5%.

The three projects noted above are still at an early stage of evaluation by the Alliance and have not yet been approved as Designated Projects by Antofagasta.

Algebuckina Project

The Algebuckina Project is located on the northeastern margin of the Gawler Craton within the Peake and Denison Inlier. This was the first Designated Project approved under the strategic alliance between Monax and Antofagasta.

The geology of the Peake and Denison Inlier has many similarities to iron-oxide copper-gold (IOCG) style mineralised sequences in the Olary Block in South Australia, as well as the Eastern Succession of the Mt Isa Inlier Queensland.

Detailed ground gravity and magnetic surveys were completed over two identified targets. The Eitzen Bore target is a 5km long, non-magnetic, 3 milligal gravity anomaly. Processing and modelling of the gravity data can support a dense body with specific gravity values between 3.8 and 4.2 g/cc at a depth of 600-700m. The modelled gravity profile is comparable

Quarterly report for the period ending 30 September 2013 ~ 6 ~

to gravity models developed by Monax for the Carrapateena and Prominent Hill deposits. The anomaly may also be explained by a non-magnetic mafic unit at shallow depth.

Based on the results received to date, Antofagasta has made the decision not to take up its option to earn an additional 19% interest and under the terms of the Agreement, Antofagasta will retain a 51% interest and the 51/49 Phase will commence.

Punt Hill Project – copper-gold (Monax 100%; Antofagasta earning 51%)

The Punt Hill Project is located within the highly prospective Olympic IOCG province on the eastern margin of the Gawler Craton in northern South Australia. This province is host to the world class Olympic Dam and Prominent Hill mines, as well as the recently discovered Carrapateena and Hillside deposits.

The Punt Hill Project is subject to a farm-in agreement with a wholly owned subsidiary of major Chilean mining company Antofagasta plc (“Antofagasta”).

Antofagasta has invested approximately US$3.9 million in the Project since August 2010. Under the Punt Hill Farm-In Agreement, Antofagasta can earn a 51% interest in the Project upon reaching US$4 million expenditure in the Project.

During the quarter, Monax continued to review and model geological and geophysical data generating more targets on the Punt Hill project. These targets will be presented to Antofagasta for drilling approval at the November Monax – Antofagasta Technical Committee Meeting.

Other Projects

No work was undertaken on Monax’s other projects.

For further information please contact:

Gary Ferris Managing Director Monax Mining Ph: (08) 8245 4900 Email: info@monaxmining.com.au

Duncan Gordon Investor Relations Ph: 0404 006 444

‘The information in the Quarterly Report that relates to Exploration Results, Mineral Resources, Ore Reserves or targets 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 2004 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.’

Information in this report that relates to Mineral Resources was compiled by Ms Sharron Sylvester, who is a Member of the Australian Institute of Geoscientists (RPGeo 10125). Ms Sylvester is a full-time employee of AMC Consultants Pty Ltd and has sufficient experience relevant to the styles of mineralisation and to the activities which are being reported to qualify as a Competent Person as defined by the JORC Code, 2012 and consents to the release of the information compiled in this report in the form and context in which it appears.

Quarterly report for the period ending 30 September 2013 ~ 7 ~

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10.

Name of entity

	Monax Mining Limited	Monax Mining Limited
	ABN 96 110 336 733 Consolidated statement of cash flows
			30 September	2013
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Cash call contributions under JV agreements Other Net Operating Cash Flows		Current quarter $A’000		Year to date ( 3 months) $A’000
		- (374) - - (172) - 11 - - - 22		- (374) - - (172) - 11 - - - 22
		(513)		(513)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)		- (2) (14) - 200 - - 12 -		- (2) (14) - 200 - - 12 -
		196		196
		(317)		(317)

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(317)	(317)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) Costs from issue of shares, options etc. Net financing cash flows	- - - - - (14)	- - - - - (14)
	(14)	(14)
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end ofquarter	(331) 1,375 -	(331) 1,375 -
	1,044	1,044

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
		167
		-
1.25	Explanation necessaryfor an understandingof the transactions
	The amount at 1.23 above represents non executive directors’ fees and executive director’s salary (including SGC superannuation), legal fees paid to a legal firm in which a director is a partner, contributions to Joint Venture expenditure made to a related party and service fee payments to an associated entity. The amount at 1.24 above represents costs to be recovered in relation to shared facilities from a related entity and provision of exploration management services.

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

• 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

• See chapter 19 for defined terms.

Appendix 5B Page 2

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Appendix 5B Mining exploration entity quarterly report

Marmota Energy Limited pursuant to the Farm-In and Joint Venture Agreements for EL 4510 (formerly EL 3358), EL 5124 (formerly EL 3910), EL 5122 (formerly EL 3911) and EL 5209 (formerly EL 4000) has incurred on an accruals basis $23,597 in the quarter ending 30 September 2013.

Antofagasta Minerals S.A. pursuant to the Farm-In Option Agreement – Punt Hill Project for EL 4642 and EL 4548 has incurred on an accruals basis $46,602 in the quarter ending 30 September 2013.

Financing facilities available

Add notes as necessary for an understanding of the position.

	3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount used $A’000
		-	-
		-	-

Estimated cash outflows for next quarter

$A’000 4.1 Exploration and evaluation 200 4.2 Development - 4.3 Production - 4.4 Administration 150 350 Total

Reconciliation of cash

Total Reconciliation of cash		350
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	427	758
	615	615
	-	-
	2	2
Total: cash at end of quarter(item 1.22)	1,044	1,375

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter
	EL 5093	Relinquished	100%	0%
	EL 5312 (formerly ELA 2013/00063) EL 5316 (formerly ELA 2013/00069) ELA 2013/00146 ELA 2013/00149	Granted Granted Application Application	100% 100% 0% 0%	100% 100% 100% 100%

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note3) (cents)	Amount paid up per security (see note3) (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	150,214,803	150,214,803
	700,000	700,000
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	10,000 425,000 225,000 325,000	Nil Nil Nil Nil	Exercise Price $0.0517 $0.0917 $0.051 $0.053	Expiry Date 23/12/2013 05/03/2015 28/07/2016 23/07/2017
	215,000	Nil	$0.246	18/07/2013
7.11 Debentures (totals only)

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

7.12 Unsecured notes (totals only)

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

• 2 This statement does / ~~does not~~ * (delete one) give a true and fair view of the matters disclosed.

Sign here: ..................... Date: ....31/10/2013....... ( ~~Director~~ /Company secretary)

Print name: Virginia Suttell

Notes

1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

== == == == ==

• See chapter 19 for defined terms.

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