FireFly Metals Ltd. — Interim / Quarterly Report 2016

Oct 30, 2016

Exploration 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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31 October 2016

Monax Mining Limited Quarterly Report

For the quarter ended 30 September 2016

HIGHLIGHTS

o Litchfield Lithium Project

• Binding term-sheet signed for new NT-based lithium project

• Initial rock chip sampling reports lithium up to 8.03% from project area

• Field mapping and sampling show four main NNW trending pegmatite zones within eastern part of project area – soil sampling program planned in December quarter

• Mobile metal ion sampling by tenement holder outlines prospective zone of anomalous lithium under shallow cover at the southern part of project area – auger sampling planned in December quarter

o Percyville Gold Project

• Binding term-sheet signed for mining lease and exploration tenement at Percyville, northern 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 and silver up to 620 g/t

• Surface samples from exploration tenement report copper up to 21.6%

• Maiden drilling program planned in December quarter

Quarterly report for the period ending 30 September 2016 ~ 1 ~

Corporate

In the three months to 30 September 2016, Monax Mining Limited (“Monax”) (ASX:MOX) has reshaped its exploration portfolio with the addition of two new projects: Litchfield Lithium Project and Percyville Gold Project. Monax also withdrew from the Bullock Creek Project to concentrate its efforts on these two new projects.

During the Quarter, Monax completed a non-renounceable entitlement issue and subsequent shortfall placement, which raised in excess of $1.5 million on the basis of one New Share for every two ordinary fully paid shares held in the Company at an issue price of $0.010 per share.

As at 30 September 2016, Monax has a cash balance of $ [X] million. During the quarter, [X] $ was spent on exploration.

Exploration

Monax has six current project interests shown below in Figure 1:

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Figure 1: Location of Monax’s projects as of 30 September 2016

Quarterly report for the period ending 30 September 2016 ~ 2 ~

Litchfield Lithium Project

During the September quarter, Monax signed a binding term-sheet with the owner of three Exploration Licences in the Litchfield area, Northern Territory. The Litchfield area is located approximately 110 kilometres south of Darwin and part of the Litchfield Pegmatite belt which is almost 200km long and includes the Bynoe Pegmatite Field to the north.

Initial mapping and sampling by Monax at Litchfield reported high-grade lithium rock chip samples up to 8.03% Li2O (see Plate 1 and ASX Releases 18 July 2016; 26 July 2016 and 31 August 2016 for details). Full sampling results are presented in Table 1.

Mapping and sampling by Monax has outlined four main pegmatite zones within the eastern part of the project area. Monax is planning a soil sampling program to test these areas for spodumene.

Mobile metal ion (MMI) sampling by the tenement holder within the southern part of the project area reported anomalous lithium and tantalum on one sampling traverse. There is minimal outcrop in this area, but the presence of scattered outcrops of dolerite and biotite pegmatite suggests that the basement is shallow. Monax will undertake an auger sampling program to verify these results and outline areas for drilling. The Company will also embark on costeaning at the White Rocks site.

The exploration activities highlighted above are due to commence in early November upon receipt of statutory approvals and should take approximately two weeks to complete.

Agreement Terms

Under the terms of the agreement, Monax has the right to earn a 90% interest in Exploration Licences 29731, 28462 and 30521 by spending A$1,500,000 on drilling activities within 24 months of the date of execution of transaction documentation.

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

• sell a 10% 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 10% 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 during which time the vendor will be free carried until a decision to mine (DTM).

Upon a DTM, the vendor has the option to co-fund expenditure based on a respective 10% interest or convert the interest to an ongoing net smelter royalty of 2% for all mineral sales derived from the tenement.

Quarterly report for the period ending 30 September 2016 ~ 3 ~

Table 1:

Results for Monax rock chip sampling for lithium on Litchfield Project

Site	Easting	Northing	Sample No	Li2O %	Lithology
765	691825	8505988	140333	2.39	Lepidolite
765	691825	8505988	140334	2.20	Lepidolite
765	691825	8505988	140335	2.13	Lepidolite
765	691825	8505988	140336	1.97	Lepidolite
765	691825	8505988	140337	2.15	Lepidolite
844	695075	8508420	140339	0.01	Quartz
844	695075	8508420	140341	6.71	Amblygonite
845	695062	8508420	140342	7.55	Amblygonite
847	683681	8499158	140343	0.60	Biotite pegmatite
849	692694	8502153	140344	0.11	Pegmatite
850	692527	8502679	140346	0.11	Pegmatite
852	693180	8502085	140348	0.06	Pegmatite
894	695066	8508420	140349	5.75	Amblygonite
894	695066	8508420	140353	0.01	Quartz
895	695071	8508422	140350	8.03	Amblygonite
896	694952	8508220	140351	0.11	Pegmatite
921	674548	8504436	140352	0.19	Pegmatite
927	692173	8498570	140355	0.01	Quartz
928	691883	8506133	140356	7.62	Amblygonite
928	691883	8506133	140357	4.95	Amblygonite
929	691837	8505906	140358	2.39	Lepidolite
932	692622	8503398	140359	0.08	Pegmatite
933	692429	8503900	140360	0.03	Pegmatite
938	683594	8499394	140361	0.39	Biotite pegmatite
938	683594	8499394	140362	0.34	Biotite pegmatite

Quarterly report for the period ending 30 September 2016 ~ 4 ~

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Figure 2: Location of Litchfield Project including sampling locations.

Quarterly report for the period ending 30 September 2016 ~ 5 ~

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Plate 1: High-grade amblygonite sample from White Rocks area, Litchfield Project.

Quarterly report for the period ending 30 September 2016 ~ 6 ~

Percyville Gold Project

During the quarter, Monax signed a binding term sheet with the owner of ML30216 and EPM25370 (see Figure 3). 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 2 and ASX Release 23 August 2016 for full details).

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 high-level igneous activity during the Permo-Carboniferous (see Plate 2).

Based on these highly encouraging sampling results, Monax has completed an induced polarisation survey and is planning a program of reverse circulation drilling.

Surface sampling results for EPM 25370 also reported copper up to 21.6% (see Table 3).

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.

Quarterly report for the period ending 30 September 2016 ~ 7 ~

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Figure 3: Location of Percyville Project (ML 30216 & EPM 25370)

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Plate 2: Sample of rock from ML 30216

Quarterly report for the period ending 30 September 2016 ~ 8 ~

Table 2: 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

Quarterly report for the period ending 30 September 2016 ~ 9 ~

Table 3: 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	-

Croydon Gold Project

Monax is awaiting the grant of EPM 26203 and no further work was undertaken during the quarter.

Bullock Creek Lithium Project

Monax withdrew from the Bullock Creek Project during the quarter.

Phar Lap Project

(Monax 100% - Iluka Resources option to earn 80%)

No work was undertaken on the Project during the quarter.

For further information please contact:

Gary Ferris Managing Director Monax Mining Ph: (08) 8232 8320 Email: info@monaxmining.com.au

‘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 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.’

Quarterly report for the period ending 30 September 2016 ~ 10 ~

Tenement Holdings as of 30 September 2016

Below is a table of Monax Mining Limited’s and Monax Alliance Pty Ltd’s current tenement holdings as of 30 September 2016.

Monax Mining Limited

Tenement	No.	Status	Monax Interest	Details	Tenure holder
Punt Hill	EL 5774	Granted	100%		Monax Mining
Yeltacowie	EL 5729	Granted	100%		Monax Mining
Melton	EL 5122	Granted	25% of all minerals	JV with Marmota Energy	Marmosa P/L*
North Melton	EL 5209	Granted	25% of all minerals	JV with Marmota Energy	Marmota Energy
Phar Lap	EL 5123	Granted	100%	Farm-In with Iluka Resources	Monax Mining
Nullarbor**	EL 5077	Granted	10%	Joint Venture with Western Areas	Monax Mining/Western Areas
North Yalata**	EL 5199	Granted	10%	Joint Venture with Western Areas	Monax Mining/Western Areas
East Yalata**	EL 5200	Granted	10%	Joint Venture with Western Areas	Monax Mining/Western Areas
Shoulder Hill	ELA 2014/194	Application	100%		Monax Mining
Bowilia Hill	EL 5669	Granted	100%		Monax Mining
Croydon#1	EPM 26038	Granted	100%		Monax Mining
Croydon#2	EPM 26203	Application	100%		Monax Mining

* Marmosa Pty Ltd (a wholly-owned subsidiary of Marmota).

** Monax’s 10% interest currently being transferred to Western Areas Limited

Monax Alliance Pty Ltd

Monax Alliance	Pty Ltd
Tenement	No.	Status	Monax Interest	Details	Tenure holder
Kulitjara	ELA 2013/168	Application	100%		Monax Alliance P/L
Anmuryinna	ELA 2013/169	Application	100%		Monax Alliance P/L
Poole Hill	ELA 2013/170	Application	100%		Monax Alliance P/L

Quarterly report for the period ending 30 September 2016 ~ 11 ~

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

+Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

Name of entity

Monax Mining Limited

ABN 96 110 336 733	Quarter ended (“current quarter”)
96 110 336 733	30 September 2016

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) staff costs (e) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Research and development refunds 1.8 Other (provide details if material) 1.9 Net cash from / (used in) operating activities	- (182) (171) 5	(182) (171) 5
	(348)	(348)
2. Cash flows from investing activities 2.1 Payments to acquire: (a) property, plant and equipment (b) tenements (see item 10) (c) investments (d) other non-current assets	(2)	(2)

• See chapter 19 for defined terms

1 September 2016

Page 1

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000	Year to date (3 months) $A’000
2.2 Proceeds from the disposal of: (a) property, plant and equipment (b) tenements (see item 10) (c) investments (d) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material) 2.6 Net cash from / (used in) investing activities
	(2)	(2)
3. Cash flows from financing activities 3.1 Proceeds from issues of shares 3.2 Proceeds from issue of convertible notes 3.3 Proceeds from exercise of share options 3.4 Transaction costs related to issues of shares, convertible notes or options 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (provide details if material) 3.10 Net cash from / (used in) financing activities	1,503 (94)	1,503 (94)
	1,409	1,409
4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above) 4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	151 (348) (2) 1,409 -	151 (348) (2) 1,409 -
	1,210	1,210

• See chapter 19 for defined terms

1 September 2016

Page 2

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	1,195 15	136 15
	1,210	151
6. Payments to directors of the entity and their associates Current quarter $A'000 6.1 Aggregate amount of payments to these parties included in item 1.2 115 6.2 Aggregate amount of cash flow from loans to these parties included in item 2.3 - 6.3 Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2
		Current quarter $A'000
		115
		-

Non-Executive Directors fees and Executive Director’s consultancy.

7.	Payments to related entities of the entity and their	Current quarter
	associates	$A'000
7.1	Aggregate amount of payments to these parties included in item 1.2		-
7.2	Aggregate amount of cash flow from loans to these parties included		-
	in item 2.3
7.3	Include below any explanation necessary to understand the transactions included in
	items 7.1 and 7.2

• See chapter 19 for defined terms 1 September 2016

Page 3

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

	8. Financing facilities available Add notes as necessary for an understanding of the position Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 8.1 Loan facilities - - 8.2 Credit standby arrangements - - 8.3 Other (please specify) - - 8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
		-	-
		-	-
		-	-

9. Estimated cash outflows for next quarter	$A’000
9.1 Exploration and evaluation 9.2 Development 9.3 Production 9.4 Staff costs 9.5 Administration and corporate costs 9.6 Other (provide details if material) 9.7 Total estimated cash outflows	150 180
	330

10. Changes in tenements (items 2.1(b) and 2.2(b) above)	Tenement reference and location	Nature of interest	Interest at beginning of quarter	Interest at end of quarter
10.1 Interests in mining tenements and petroleum tenements lapsed, relinquished or reduced	Bullock Creek EPM 26176 Bullock Creek EPM 26214 Bullock Creek EPM 26215	Relinquished Relinquished Relinquished	100% 100% 100%	- - -
10.2 Interests in mining tenements and petroleum tenements acquired or increased

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

Sign here:

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...................... Date: ...31 October 2016....................

(Company secretary)

Print name: Kaitlin Smith........................................

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 that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. See chapter 19 for defined terms 1 September 2016

Page 5