GREENWING RESOURCES LTD — Interim / Quarterly Report 2017

Jul 30, 2017

QUARTERLY ACTIVITIES REPORT JUNE 2017

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QUARTERLY ACTIVITIES REPORT FOR JUNE 2017

HIGHLIGHTS

• Bass Metals’ (“Bass” or the “Company”) primary focus remains the optimization and refurbishment of its flagship asset, the Graphmada Graphite Mine, in order to reach a 6,000tpa run-rate of production in 2017.

• First pass drilling at the Mahefedok Deposit delivered a maiden Mineral Resource[1 ] of 3.5 Mt at 4.2% Total Graphitic Carbon (TGC), immediately adjacent to existing Graphmada Mine infrastructure.

• Bass signed a sales and purchase Memorandum Of Understanding (MOU) for 50% of forecast Stage 1 concentrate production with Possehl Erzkontor GmbH & Co. KG (Possehl). Based in Europe, Possehl intends to purchase 3,000 metric tonnes per annum of graphite concentrates for the European market over a period of three years.

• The Company signed a binding agreement to acquire a high-grade lithium project (Millie’s Reward), located in Madagascar. The Company completed its technical due diligence, which confirmed significant spodumene mineralization with grades up to 7.08% Li2O.

• Independent laboratory testing of Graphmada concentrates demonstrated the highest known flake size distribution of 71.3% large to super jumbo flake size from an operating mine and qualify as the benchmark for foundries, crucible and refractory applications.

• Expandability tests across all flake sizes also delivered excellent results, with the maximum expansion volume of 510 cm3/g achieved with extremely large flakes > 400 microns. These results exceed typical concentrates currently available.

• The test work also demonstrated Graphmada concentrates as highly suitable for lithiumion battery applications, with a very high purity of 99.99 wt.% carbon achieved. All analyzed parameters including bulk density, tap density and surface area (BET) are similar to typical spherical graphite products in the market and meet leading battery anode manufacturer specifications.

• The Company executed a Term Sheet, subject to the completion of due diligence, to dispose of all its tenements and mining related interests in Tasmania to NQ Minerals Plc.

• The Company received over $2.0m in advance for the the issue of Convertible Notes . The Notes are to be issued in the short term, to existing shareholders and the Company’s Board and Management and shall issued on terms which are favorable to the Company.

1 Reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (‘the JORC Code 2012’).

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QUARTERLY ACTIVITIES REPORT JUNE 2017

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Bass Metals Limited (ASX: “BSM”) (the “Company”) is pleased to inform shareholders of its activities for the quarter. The Company continues to pursue its primary strategy of delivering shareholder value via the optimisation and expansion of the operating Graphmada Graphite Mine, in parallel with continued exploration of our highly prospective tenement package in Madagascar.

THE GRAPHMADA JUMBO FLAKE GRAPHITE MINE

Bass Metals Ltd is one of only three publicly listed graphite producers in the world. The Company 100% owns and operates the Graphmada large flake graphite mine, Bass’ flagship project, located in eastern Madagascar. Madagascar has been a recognized producer and exporter of premium graphite for over 100 years and sets the world standard for product quality and flake size.

The Graphmada Mine has 40-year

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mining permits in place, containing four premium quality, large flake, graphite deposits hosted in weathered graphitic gneiss, a soft, easily minable rock that incurs low mining costs. With all associated mining infrastructure and logistics in place, the mine currently produces and sells a range of graphite concentrates into multiple market segments, to customers in India, the United States and Europe.

With the aim of generating revenue through lowest quartile cost production, the mine is currently being optimized by an experienced management team to 6,000 tonnes per annum (Stage 1) with improved final graphite concentrate grades, in order to grow cash margins. Graphmada also has significant potential for low capital intensity expansion. Bass plans to invest capital to expand production to greater than 20,000 tonnes per annum (Stage 2) of graphite concentrate sales by 2019.

In addition to exploring the greater mineralization potential of Madagascar, the Company has also made the strategic decision, in parallel with the optimization of Graphmada, to actively explore and develop deposits in the immediate proximity to the mine, to materially expand its resource inventories.

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Health, Safety, Environment and community

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As optimisation and refurbishment activities advance to completion, and remote field activities at Millie’s Reward and Andapa progress, the team’s solid focus remains on ensuring all activities are performed safely and efficiently. As such, results for the quarter included:

• No Lost Time Injuries (LTI’S) were reported in the quarter.

• The Graphmada Clinic was certified by the Malagasy Government.

• Two Fire Fighting Trailers arrived on site (critical equipment required for mine recommissioning and camp safety).

No environmental issues were reported in the quarter. The Company progresses with the rehabilitation of drill sites at Mahefedok, post the 2,300m drilling campaign.

The Company also continues to significantly improve the region in which it operates through the community engagement program: Graphmada Care. The program is based on the commitment by the Company to develop its business through strong local partnerships built on five pillars: education, health, production, transparency and empowerment.

Achievements for the quarter include:

• Land Ownership Certification program completed with over 1,900 parcels of land certified, a first for Madagascar.

• The Government of Madagascar completed the certification of the Graphmada Mine Clinic. Staffed with a full time doctor the clinic can now provide services directly to all members of the community in the surrounding regions.

• Provision of transportation for students undertaking National Primary School exams.

• Provision of transport and materials for road repair in the Mahatsara district.

• Financial contribution in support of the Eastern Region of Madagascar’s celebration of Independence Day, including Brickaville district celebrations.

• Commissioned two water wells to provide clean water, with the important commissioning of a well at the Mahatsara hospital undertaken.

• The Bass Metals Board; Mr. Rick Anthon (Chairman), Mr. Jeff Marvin (Non-executive Director) and Mr. Peter Wright (Non-executive Director), with Management, visited regional officials and attended a community celebration, were Mr. Anthon reaffirmed the Company’s commitment to working with the community in delivering benefits to its people through the Company’s long-term presence in Madagascar.

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MINE OPTIMISATION AND REFURBISHMENT

Bass Metals continues to progress its strategy to optimise the Graphmada Graphite Mine, targeting materially higher revenues from superior concentrates in 2017. The first stage of the refurbishment has been successfully completed, with the Process Plant decommissioned and disassembled in part. Other elements of the project completed during the quarter were:

• Final equipment placing and orientation checked and confirmed

• Completed manufacture of mixing tank onsite

• Completed manufacture of Spinners feed bin and Main feed bin onsite

• Completed earthworks for sizing level, reshaped ore feed ramp

• Completed installation of the spinners retaining wall

• Removed electrical controls & instrumentation from control room

• Screen test work for optimal flake size range complete

• Screen manufacturing underway

• Old drying plant components completely removed

• Major equipment manufacturing underway

• Decommissioned Process Plant equipment removed and scraped

• Rod mill concrete pad refurbished

• All civil works on track according to revised schedule

• Extension of flotation line completed (retaining wall, drainage and backfill)

• Extension of re-grind line in progress

• Completed fiber optic internet upgrade

With the excellent progress in the program to date, the Company is confident of seeing an increased production profile in 2017 to a 6,000tpa run-rate (Stage 1) of high quality concentrates, moving rapidly towards production of 20,000tpa in 2019 (Stage 2). The program will be delivered at a low capital intensity and with significant economies of scale savings. This strategy will see Bass become a mid-tier producer of industrial mineral concentrates.

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Figure 1: Retaining wall and foundation works in progress for extension of flotation cell process area.

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Figure 2: Retaining wall and foundation works completed for extension of flotation cell process area.

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Figure 3: Retaining wall and foundation works in progress for extension of re-grind process area.

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Figure 4: Fabrications works being undertaken in the new, fully tooled, Workshop.

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Figure 5: Onsite fabrication of flotation cells, an example of minimising capital expenditure.

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Figure 6: Onsite fabrication of new feed bin.

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QUARTERLY ACTIVITIES REPORT JUNE 2017

MAHEFEDOK MAIDEN MINERAL RESOURCE

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Bass is delivering on its strategy to materially expand resources at Graphmada through announcing this quarter the maiden Mineral Resource for the Mahefedok Deposit[2] . The Company holds the deposit via exploitation permit number 26670, which is 100% owned. The permit grants the exclusive right for 40 years to explore and mine graphitic resources.

Table 1: Mahefedok Mineral Resource Table.

Classification	Weathering State	Tonnes (Mt)	Total Graphitic Carbon (%)	Contained Graphite (kT)
Indicated	Oxide	0.4	4.3	18.8
	Transitional	0.3	4.0	13.8
	Total	0.8	4.2	32.6
Inferred	Oxide	0.8	4.4	36.2
	Transitional	0.5	4.3	23.1
	Fresh	1.3	4.0	54.2
	Total	2.7	4.2	113.6
Total Indicated & Inferred		3.5	4.2	146.2

Note: The Mineral Resource was estimated within constraining wireframe solids defined above a nominal 3% TGC cut-off. Differences may occur due to rounding.

These resources supplement Graphmada’s Indicated and Inferred resources at Loharano of 5.7Mt @ 4.1% TGC[3] for supply to existing processing facilities and as a basis for expansion to 20,000 tonnes per annum.

The Company will look to explore and drill further Mahefedok, and other deposits within the vicinity of Graphmada to continue its strategy of materially expanding its resource inventory, while optimizing the premium asset of Graphmada, to achieve Stage 1 run rates.

SALES AND PURCHASE AGREEMENTS

The Company announced that it has signed a sales and purchase Memorandum Of Understanding (MOU) for 50% of its forecast Stage 1 premium graphite concentrate production for 2018[4] .

The concentrates to be produced from Graphmada will be sold into the refractories,

foundries and crucibles markets throughout Europe at a premium in pricing to other market segments such as battery applications.

2 Announced on the ASX 21 June 2017 and reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (‘the JORC Code 2012’).

3 Reported in accordance with the 2004 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (‘the JORC Code 2004) at a >2% cut-off and first disclosed by Stratmin Global Resource PLC under the JORC Code 2004. Bass Metals notes that the estimates have not been updated to JORC Code 2012 on the basis that the information has not materially changed since it was last reported. Reference is made to the Company's announcement of 2 September 2015, for further detail.

4 Announced on the ASX 16 June 2017.

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Possehl, based in Europe, intends to purchase 3,000 metric tonnes per annum of graphite concentrates from Bass Metals, for a period of three years from the signature date of the final sale and purchase agreement.

The Company’s partnering with a group that has been in operation for more than 100 years and generates annual revenues of greater than €350 million is an important strategic development. Their customer base includes companies from the refractory industry, metallurgy and foundries, cement and construction materials as well as chemicals and plastics processing. The partnership will benefit the Company through distributing Graphmada’s premium concentrates to end-users in Europe and establishing Graphmada concentrates as a highly valued product in end markets.

BENCHMARK CONCENTRATES

An independent German laboratory tested a bulk sample taken across a range of 2016 production sales stock from Graphmada. The bulk sample was obtained from sales stock produced pre-refurbishment and optimization.

The tests included suitability to foundries, crucible and refractory applications, as well as expandability and for potential use in lithium-ion battery applications.

Results from an independent evaluation of Graphmada’s natural flake graphite for foundries, crucible and refractory applications concluded that Graphmada concentrates demonstrated the highest known flake size distribution of 71.3% large to super jumbo flake size from an operating mine and are at Benchmark Status for foundries, crucible and refractory applications[5] due to:

• Exceptional flake size.

• A high resistance against oxidation.

• A low LOI at 4,200C

• No carbonates such as calcite and dolomite being identified, along with no other fluxes being discovered.

• A very low Sulphur (SO3) content, at 0.02 wt.-%.

• Exhibiting favorable flake ash melting temperatures.

The foundries, crucible and refractory demand for natural flake graphite accounts for more than 50% of the current global demand for natural flake graphite. The larger flake sizes >180 microns) in this market segment account for the highest ex-mine gate prices achievable in the industry.

5 Announced on the ASX 23 May 2017.

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Figure 7: Microphotograph of Graphmada graphite concentrate as received (scale: 500 microns).

Expandability tests across all flake sizes delivered excellent results[6] , with the maximum expansion volume of 510 cm3/g achieved with extremely large flakes > 400 microns. These results exceed typical concentrates currently available.

Expandable graphite receives a price premium and is in significant demand due to regulatory pressures forcing higher adoption as fire retardants and there being only a few suppliers in the world today.

The test work also demonstrated Graphmada concentrates as highly suitable for lithium-ion battery applications with a very high purity of 99.99 wt.% carbon achieved[7] .

All analyzed parameters including bulk density, tap density and surface area (BET) are similar to typical spherical graphite products in the market and meet leading battery anode manufacturer specifications.

These combined results for applications across markets confirm Graphmada concentrates as the benchmark for saleable concentrates across all market segments and supports Bass’ strategy to build an international industrial minerals business through growing Graphmada’s current production to mid-tier production levels.

7 Announced on the ASX 29 May 2017.

6 Announced on the ASX 24 May 2017.

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Figure 8: SEM micrograph of Graphmada spherical graphite.

HIGH GRADE LITHIUM PROJECT (MILLIE’S REWARD)

During the quarter Bass signed a binding agreement, subject to successful due diligence, to purchase the Millie’s Reward high-grade, pegmatite hosted, lithium project located in Madagascar[8] .

The project is a highly prospective conventional spodumene hosted Li2O deposit. Preliminary geological mapping has indicated a majority of the pegmatite dykes in the area as having subhorizontal to horizontal orientations over significant strike lengths.

8 Announced on the ASX 19 April 2017.

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Figure 9: The Millie’s Reward project significant sample results.

The Company completed its technical due diligence during the quarter, which confirmed significant spodumene mineralization with grades up to 7.08% Li2O and additional samples returning 6.93% AND 6.91% Li2O, correlating with historic data for both grade and location.

Samples of high purity Spodumene crystals (Kunzite) were also found in the project area (Figure 10).

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Figure 10: Samples of high purity Spodumene crystals (Kunzite) found in the project area.

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Figure 11: A large spodumene specimen found in the project area.

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PRODUCTION

All production has ceased to allow civil works and subsequent major equipment installation. The mine currently has 254 tonnes of graphite concentrates in stock, of which 78 tonnes were sold this quarter, as part of maintaining regular supplies, albeit in reduced quantities, to Graphmada’s main customers (note: not all sales revenue was received this quarter due to payment terms).

MANAGEMENT AND DIVESTMENT OF TASMANIAN ASSETS

During the quarter, the Company continued to comply with its Care and Maintenance Plan for its Tasmanian assets. Environmental management at the Que River site is focussed on the rehabilitation of the surface areas of the site, with significant progress being achieved in clean up, covering and re-seeding of previously disturbed areas. Daily field testing and environmental laboratory testing continued throughout the period as per the site’s Care and Maintenance Plan.

On 30 April 2017, the Company announced[9] it had executed a conditional Terms Sheet whereby Bass will, subject to the completion of due diligence, dispose of all its tenements and mining related interests in Tasmania to NQ Minerals Plc, a company listed on the London AIM exchange. The due diligence is on going and proceeding as planned, with NQ Minerals PLc now responsible for all costs during the due diligence period of 6 months, from May 2017

CORPORATE

The Company received funds in excess of $2,000,000 for the issue of Convertible Notes . . The Notes are to be issued to existing shareholders and the Company’s Board and Management and are issued on terms which are favourable to the Company. It is proposed that the notes will be issued in the short term.

The Convertible Notes shall convert to equity at the price the Company concludes a capital raising at, between 1 July 2017 and 30 November 2017 or at the value of 1.5c per share, whichever value is lower. Additionally, each note holder shall receive 1 listed option (with an execution price of 2.5c and expiry date of 31 December 2018) for each 2 shares that they will receive at the conversion date (30 November 2017).

The notes shall convert to shares upon approval of a meeting of the Company’s members. The meeting to approve the issue is proposed to be the Company’s 2017 AGM and the issue shall occur 3 business days after this date.

9 See announcement “Sale of Tasmanian Assets” 30 April 2017.

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Interest is payable at 12% on the Convertible Notes and are issued on the condition that interest will accrue and also be converted to shares on the conversion date. In the event the Notes do not convert to equity, they shall expire on 31 December 2017.

SUMMARY

The last quarter has been a period of intense activity, optimising the Graphmada asset and commencing work on the Company’s highly prospective exploration portfolio in Madagascar. The team at Bass are pleased with the Company’s progress and remain on track to deliver a 6,000tpa run-rate of production in 2017.

Yours faithfully

Tim McManus Chief Executive Officer Phone: (07) 3221 0783 Email: admin@bassmetals.com.au

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TENEMENT & PERMIT HOLDING AT QUARTER END

The Company’s interests in mining and exploration tenements and permits at the end of the quarter were as follows:

Country	Region	Tenement / Permits	Interest
Australia	Tasmania	EL48/2003 Mt Block2	100%
Australia	Tasmania	CML 103M/1987 Hellyer Mine Lease1&2	100%
Australia	Tasmania	CML 68M/1984 Que River Mine Lease2	100%
Australia	Tasmania	ML 10W/1980 Access Easement to QRML	100%
Madagascar	Antsinanana	PE 25600 Loharano (East)	100%
Madagascar	Antsinanana	PE 26670 Mahefedok	100%
Madagascar	Antsinanana	PE 24730 Antsirabe (Andapa)	100%

Notes:

CML 103M/1987 is owned by HMO a 100% subsidiary of Ivy Resources Ltd. Bass has 100% interest in all of the existing base metal resources and base metal exploration rights through a Sublease Agreement.

Intec Limited holds a 2.5% NSR Royalty over all Product from Bass’ interests in EL48/2003, CML68M/1984 and CML103M/1987.

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DISCLAIMER & CAUTIONARY STATEMENTS

DISCLAIMER

This document has been prepared by Bass Metals Limited (the “Company”). It should not be considered as an invitation or offer to subscribe for or purchase any securities in the Company or as an inducement to make an invitation or offer with respect to those securities. No agreement to subscribe for securities in the Company will be entered into on the basis of this document. This document is provided on the basis that neither the Company nor its officers, shareholders, related bodies corporate, partners, affiliates, employees, representatives and advisers make any representation or warranty (express or implied) as to the accuracy, reliability, relevance or completeness of the material contained in the document and nothing contained in the document is, or may be relied upon as a promise, representation or warranty, whether as to the past or the future. The Company hereby excludes all warranties that can be excluded by law.

FORWARD LOOKING STATEMENTS

This document may contain certain forward-looking statements. Such statements are only predictions, based on certain assumptions and involve known and unknown risks, uncertainties and other factors, many of which are beyond the Company’s control. Actual events or results may differ materially from the events or results expected or implied in any forward-looking statement. The inclusion of such statements should not be regarded as a representation, warranty or prediction with respect to the accuracy of the underlying assumptions or that any forward looking statements will be or are likely to be fulfilled. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this document (subject to securities exchange disclosure requirements). The information in this document does not take into account the objectives, financial situation or particular needs of any person. Nothing contained in this document constitutes investment, legal, tax or other advice.

COMPETENT PERSON STATEMENT

The information in this document that relates to Exploration Results and Mineral Resources is based on information compiled by Tim McManus, a Competent Person who is a member of the Australasian Institute of Mining and Metallurgy and a full-time employee of the Company. Tim McManus has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

Tim McManus consents to the inclusion of the information in this document in the form and context in which it appears.

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