GREENWING RESOURCES LTD — Interim / Quarterly Report 2019

Jan 30, 2019

ASX Announcement 31 January 2019

--- QUARTERLY ACTIVITIES REPORT

December 2018

Bass Metals Limited (ASX: “BSM”) (“Bass” or the “Company”) is pleased to provide this quarterly report as it continues to establish itself as a growing producer of high value industrial mineral concentrates.

HIGHLIGHTS

• The Company continued its progress to meeting its sustained nameplate production targets

• Material orders of graphite concentrates were received from several major end markets, with substantial forward orders in place (918mt). Considerable progress has been made in broadening sales channels for 2019

• A strategic capital raising via a placement of $3.3m was completed in December, with funds being allocated for Resource drilling, Stage 2 expansion studies and working capital

• The Company is in a robust financial position with $5.5m cash and receivables at Dec 31 2018

HEALTH, SAFETY, ENVIRONMENT AND COMMUNITY

Graphmada continues to operate with no Lost Time Injuries (LTI) and no major environmental incidents.

The Company continues to have a strong focus on community engagement activities under the Graphmada Care Program.

OPERATIONS

Following an outstanding first quarter, with the Process Plant’s production of wet tonnes ramping up through the recommissioning process and drying and screening operations meeting throughput rates, the second quarter continued to see operations deliver as planned.

In October 2018, the Process Plant, producing at its nameplate run-rate of 25 tonnes per hour feed rate at an average head grade of 4.8% Total Graphitic Carbon (TGC), achieved 502 wet tonnes of production for the month.

The latter half of the quarter saw the Processing Plant enter a scheduled shutdown period, which was undertaken for important key componentry servicing post the recommissioning and ramp up process. The team also implemented a small number of opportunistic improvements to optimise large flake graphite production and lift Fixed Carbon grade recoveries, the key value drivers for materially increasing the Company’s revenue from operations.

With the first major plant service now successfully completed and with no further shutdown scheduled for next quarter the Company has enjoyed a strong start to the calendar year, with all processing operations reaching sustainable production rates and quality parameters.

The Company retains its guidance for 6,000 tonnes production per annum.

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Mining operations at the Mahefedok North pit.

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Mining operations at the Mahefedok North pit.

SALES

For the quarter ended 31 December 2018, Bass received orders to supply 737mt of Graphite to new and existing clients. Bass remains in advanced negotiations for several large volume contracts which it is hoping to conclude during the first quarter. Whilst some of the concentrate sold represented product from our recommissioning and ramp up phase and sold at lower prices, our large and jumbo flake product was sold at prices within budget and to our price guidance.

Only a small portion of the orders received in the December 2018 quarter were shipped, with the Company receiving sales revenue of US$89,780 from the export of 118mt during the quarter. This represents a Price Received[1] per tonne of US$760/mt.

Given the nature of Graphite Concentrate markets with sales payable on 45-60 days of physical delivery, the Company, at December 31 2018, had a significant quantity of orders, for which stock is held, to deliver into over the coming quarter. This will see the Company receipt strong cash flows from sales in the coming months.

Additionally, the Company has experienced a strong start to the year for sales over January 2019. The Company anticipates significant sales from stock this quarter from an existing closing inventory of 1,526mt.

1 Explanatory Note: When Companies in the graphite sector refer to ‘Basket Price’ they are referring to one tonne of final graphite concentrate that represents typical flake size distribution and grade achievable from the Mineral Resource from which they are mining ore and processing concentrates.

Bass’ Basket Price, as previously announced[1] , is based on a flake size distribution from significant independent laboratory testing and past production of graphite concentrates from the Graphmada Mine. Conservatively, Bass provides a US$ price per metric tonne, herein, based on the typical flake size distribution achievable from its Mineral Resources, announced in accordance with the JORC Code.

Price Received per Tonne is the price reflective of the tonnes sold and holds no correlation with the Basket Price as flake size distribution is highly variable during the course of sales. To compare Price Received verse Basket Price the prices must be adjusted to the flake size distribution of the resource and not that of the flake size distribution sold.

Given the nature of a gradual ramp up to optimal concentrate breakdown the Company has sold transitional product over the last quarter at below guided basket price levels. The Company maintains its guidance for an average basket price of US$900/mt during 2019.

Bass also continues to broaden its sales channels and is dealing and negotiating with a number of new markets and potential buyers. The qualification process for any new buyer takes both time and resources and Bass is pleased that over the course of 2018 it has pre-qualified into several key end markets.

PRODUCTION & SALES METRICS

Mining & Processing

ining & Processing	ining & Processing
Qtr. Feed Tonnes Head Grade Process Recovery Wet Tonnes Produced Carbon Grade
FY Q1	37,195 4.7 % 82% 1,230 94%
FY Q2	21,141 4.8 % 78% 732 91%
FY YTD	58,366 4.7 % 81% 1,962 93%

Stock Produced & Inventory

tock Produced & Inventory	tock Produced & Inventory
Qtr. Opening Stock Tonnes Sold Dried Tonnes Produced Closing Stock Forward Orders
FY Q1	240 274 1,121 1,087 -
FY Q2	1,087 78 517 1,526 918
	- 352 1,638 - -

EXPLORATION

Various Graphite Prospects

Exploration activities for the Company’s various graphite prospects continued throughout the quarter with the aim of increasing the Company’s resource inventory, this included drill plans for the brownfield deposits of South Mahefedok and Mahela in 2019.

Millie’s Reward Lithium Project

Exploration at Millie’s ramped down during the quarter, post the completion of drilling, with the team endeavouring to complete the ASX/JORC requirements for quality control and assurance for subsequent market release of results.

PROJECTS

Feasibility works continue for the potential expansion of Graphmada’s production. The Company is completing this study internally incorporating the significant intellectual property the company now has from Stage 1 and current operations, therefore significantly reducing construction and commissioning risks.

In addition, announced during the quarter, the Company is progressing a study for the construction of an Expandable Graphite Plant, as it continues to deliver its strategy for material growth as a producer of high value graphite concentrates.

Dorfner Anzaplan GmbH (‘Anzaplan), a leading German Industrial Engineering team, having been engaged by Bass to complete the study, will work with Bass’ internal projects team to develop a construction and operations plan for the downstream processing of large flake concentrates produced from the Company’s 100% owned, debt free Graphmada Mine.

The study will focus on a proportion of the Company’s expansion of production to supply the Expandable Graphite Plant, which mixes Graphmada’s

predominantly large flake graphite with an intercalation agent, followed by filtration, washing and neutralization for drying, screening and bagging.

CORPORATE

Capital Raising Completed

In December, Bass completed a Strategic Capital Raising to raise $3.3m (before costs) via a placement at an issue price of $0.0125 per share (“the Placement”). Subscribers to the Placement also received one unlisted option exercisable on or before 31 December 2020 at a price of $0.05 for each two shares issued.

The Company was pleased to receive strong demand and to have obtained the maximum amount sought of $3.3m with support from leading firms Bizzell Capital Partners Pty Ltd, Morgans Corporate Pty Ltd and Baillieu Limited. Additionally, all existing major shareholders participated in the raising. Directors also subscribed to the Placement

Net proceeds from the Placement will be used to fund Mineral Resource drilling, part of the Stage 2 expansion at the Graphmada Mine, capital equipment costs and working capital.

The Placement leaves the Company in a strong financial position at 31 December 2018 – approximately A$5.5m in cash and receivables on hand.

Management and Divestment of Tasmanian Assets

The Company continued its care and maintenance activities in Tasmanian during the quarter. The Fossey and Que River projects continue to comply with their respective Care and Maintenance Plans.

The Company continues its divestment process for these assets and has engaged with a number of parties in this regard. Discussions are ongoing in this regard.

SUMMARY

Bass is on a sound financial platform with no debt, 100% ownership of its mining assets and cash and receivables of $5.5m. Additional funds from the December Placement and growing sales income will allow Bass to maintain a prudential level of cash on hand whilst ramping up its mining operations and progress Stage 2 expansion works.

For more information, please contact:

Tim McManus Chief Executive Officer Phone: (07) 3203 5894 Email: admin@bassmetals.com.au www.bassmetals.com.au @bassmetals

Peter Wright Executive Director Phone: (07) 3203 5894 Email: admin@bassmetals.com.au

TENEMENT & PERMIT HOLDING

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

Country	Region	enement / Permits n	terest
Australia Australia Australia Australia Madagascar Madagascar Madagascar Madagascar Madagascar Madagascar	Tasmania Tasmania Tasmania Tasmania Antsinanana Antsinanana Antsinanana Antsirabe Antsirabe Antsirabe	EL48/2003 Mt Block 2 (under Renewal) CML 103M/1987 Hellyer Mine Lease 1&2 CML 68M/1984 Que River Mine Lease2 ML 10W/1980 Access Easement to QRML PE 25600 Loharano (East) PE 26670 Mahefedok PE 24730 Andapa PRE 4383 PE 11545 PE 39808	100% 100% 100% 100% 100% 100% 100% 100% 100% Mineral Rights

Notes:

1. 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.

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

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 announcement contains certain ‘forward-looking statements’ within the meaning of the securities laws of applicable jurisdictions. Forward-looking statements can generally be identified by the use of forward-looking words such as ‘may,’ ‘should,’ ‘expect,’ ‘anticipate,’ ‘estimate,’ ‘scheduled’ or ‘continue’ or the negative version of them or comparable terminology.

Any forecasts or other forward-looking statements contained in this announcement are subject to known and unknown risks and uncertainties and may involve significant elements of subjective judgment and assumptions as to future events which may or may not be correct. There are usually differences between forecast and actual results because events and actual circumstances frequently do not occur as forecast and these differences may be material.

Bass Metals does not give any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur and you are cautioned not to place undue reliance on forward-looking statements. 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.

Important information

This announcement does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States, or in any other jurisdiction in which such an offer would be illegal. The securities referred to in this document have not been and will not be registered under the United States Securities Act of 1933 (the ‘US Securities Act’), or under the securities laws of any state or other jurisdiction of the United States and may not be offered or sold, directly or indirectly, within the United States, unless the securities have been registered under the US Securities Act or an exemption from the registration requirements of the US Securities Act is available.

This document may not be distributed or released in the United States.

Competent Person Statement

The information in this document that relates to Exploration Results 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 fulltime employee of the Company.

Tim McManus has sufficient experience that is relevant to the style of mineralization 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.