GREENWING RESOURCES LTD — Interim / Quarterly Report 2020

Jul 30, 2020

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ASX Announcement 31 July 2020

--- QUARTERLY ACTIVITIES REPORT June 2020

Bass Metals Limited (ASX: BSM ) ( Bass or the Company ) is pleased to provide this quarterly report as it continues its strategy of establishing large scale mining and processing operations with integrated downstream product manufacture at its wholly owned Graphmada Graphite Mining Complex in Madagascar.

HIGHLIGHTS

• During the quarter Bass continued follow up drilling of the Mahela-Loharano Mineralization Trend, discovering the Mangabe Deposit, a large flake graphite zone over approximately 1.1km, at an approximate width of 180m, which remains open at depth as well as along strike. Bass is continuing to extensively drill this target.

• Bass continues to make progress in expanding a commercially proven ore body. Graphmada concentrates characterised as large flake and free of penalty elements, the two key constituent properties required for advanced material concentrates.

• Bass sold and shipped 191mt of concentrates in the June quarter. All remaining stock (50mt) has subsequently been sold in the September quarter.

• During the quarter the Company announced an Equity Raising consisting of a Placement, Conditional Placement and Share Purchase Plan (SPP) for A$3 million. The Conditional Placement is subject to approval of shareholders at a meeting to be convened in early September 2020.

• A significant cost reduction program continued in response to the impacts of CoVID-19 inclusive of further workforce reductions and salary reviews.

• Bass signed a Memorandum of Understanding with Swinburne University of Technology to advance carbon materials research and product development.

EXPLORATION

The Company’s main focus during the quarter has been progressing its exploration program.

Mangabe Discovery

During the June quarter the Company was pleased to announce the discovery of the Mangabe Deposit, located in direct proximity to the Graphmada mining and processing infrastructure established at Loharano. The Deposit is immediately adjacent to the sealed National Highway giving excellent access to the Port of Tamatave, 110km to the north, and the location of Bass’ warehouse and logistics center. The Deposit is fully permitted for exploration and mining for 40-years as part of the Graphmada Mining Complex.

Location map

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The Company completed a first phase (reconnaissance) drilling program consisting of 3 lines of drilling (M01/M02/M03) and 56 holes, totaling 539m drilled, to an average depth of 9.6m (from surface).

• Line M01 delineated graphite at depth over approx. 180m, with results up to 7.3m @ 5.2% Fixed Carbon (FC).

• Line M02 delineated graphite at depth over a minimum width of 120m, with results up to 11.5m @ 3.4% FC.

• Line M03 delineated graphite at depth over approx. 180m, with results up to 4.7m @ 4.4% FC.

The results of this initial program has discovered a large flake graphite zone over approximately 1.1km in strike length, at an approximate width of 180m. The discovery remains open at depth as well as along strike.

Bass has drilled to 10 metres depth for the overwhelming majority of holes to date and would note that typically at Graphmada that Grades increase from 1030m depth.

A summary of key intercepts:

MGBA004 5.2m @ 4.6% FC (incl. 3.0m @ 7.3 % FC) MGBA005 3.0m @ 3.0% FC MGBA006 5.6m @ 4.0% FC MGBA009 9.5m @ 4.6% FC MGBA010 7.3m @ 5.2% FC MGBA011 7.5m @ 4.2% FC MGBB001 4.0m @ 3.9% FC MGBA026 7.5m @ 4.3% FC MGBA027 9.2m @ 4.2% FC MGBA030 9.0m @ 4.6% FC MGBA031 2.0m @ 5.5% FC MGBA038 5.0m @ 4.0% FC MGBA039 4.5m @ 4.1% FC MGBA040 1.5m @ 5.3% FC MGBA041 4.7m @ 4.4% FC (incl. 3.7m @ 5.4 % FC)

Detailed results for all holes drilled are provided in the ASX Announcement dated 16 July 2020 ‘Exploration Update - Large Flake Graphite Discovery’.

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Mangabe collar location map
Line M01
Approx. 180m graphite
zone up to 7.3m @ 5.2% FC
Approx. 120m graphite zone
Line M02 up to 11.5m @ 3.4% FC
Line M03
Approx. 180m graphite zone
up to 4.7m @ 4.4% FC
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Mangabe drill section – line M01

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Line M01
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Next Steps

Over the next 12 months, Bass will extensively shallow drill the full length and width of the Mineralized Trend to an average depth of 10m to delineate the overall mineralization footprint. The aim of which will be to announce a maiden large-scale Mineral Resource in accordance with the JORC Code (2012) that incorporates the Loharano, Mahela and Mangabe discoveries, allowing for the development of this Mineralized Trend as a single large-scale resource.

As an extension of this work, the Company will then embark on a targeted diamond drilling program with the aim to upgrade its resources with sufficient confidence to potentially state a maiden large-scale Ore Reserve, also in accordance with the JORC Code (2012).

Cumulative growth in Mineral Resources[1]

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1 ASX Announcement “Investor Presentation” released 2 June 2020.

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This approach will allow the Company to continue its low-cost exploration success, with shallow reconnaissance drilling conducted at less than A$12 per metre.

With a well-developed mineralization footprint from which to plan targeted diamond drilling, Bass can then optimize and progress capital efficient drilling as part of its development pathway towards large-scale mining and processing operations at an exceptionally low discovery cost of A$3.90 per tonne of ore.

PROJECTS

Bass over the course of its Stage 1 operations has established a strong platform for the successful scaling of its current operations, attaining key milestones and significantly de-risking its overall operations.

Bass continues with detailed feasibility studies as part of the next phase of development to substantially increase production, via modular process increments.

The feasibility studies undertaken by the Company will underpin the Company’s application for Large Project Status under the Large Mining Investment Code (LMIC) as defined under Malagasy Mining Law (Law no. 2001-031) and drafted with the assistance of the World Bank. This law provides for specific investment incentives for projects achieving ‘Large Project Status’ and is a critical ingredient in making a large project attractive for investors in Madagascar. Certification of a project under the LMIC requires completion of environmental studies, issuance of mining or exploration permits, and accreditation by the Malagasy government of the investment plan.

OPERATIONS

Production

The Board of Directors together with Senior Management made the decision in the March quarter to suspend mining and processing for the foreseeable future due to the logistical impacts of CoVID-19 and additional control measures issued by Governments.

The Company has now placed the Graphmada mining and processing infrastructure into Care & Maintenance.

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Sales

Bass sold 191mt of concentrates in the June quarter. It received $334k relating to sales conducted in the March and June quarters with a further $142k receivable at quarter end. All remaining stock (50mt) has been sold subsequent to quarter end.

Bass has now sold its graphite concentrates into all key markets in Europe, China, USA and India. Bass has yet to have a single tonne rejected or penalized for quality since production was recommissioned.

CORPORATE

Cost Reductions

With the onset of Covid19 and its resultant restrictions to international business, the Company made the decision to defer production for the foreseeable future and continue its previously announced cost reduction program, seeking to maximizes the Company’s progress at minimal cost.

During the quarter the Company made the decision to centralize all activities in Brisbane. This will see a significant reduction of expenses in Australia both from streamlining operations to one centralized office and a reduction in Australian based workforce (50% reduction). This is in addition to the suspension of mining and processing activities in Madagascar as noted above.

These measures will see a dramatic reduction in the Company’s running costs while it advances its growth strategy.

Capital Raising

During the quarter the Company completed an Equity Raising consisting of a Placement and Share Purchase Plan (SPP) (see ASX announcements dated 2 and 30 June 2020) raising of $1.68 million.

The Conditional Placement raising a further $1.35 million is subject to approval of shareholders at a meeting to be convened in early September 2020.

The funds raised will be used as follows:

• further exploration at the emerging Mahela and Mangabe deposits;

• progress mine development;

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• progress a definitive feasibility study to determine the optimal plan to increase production capacity at Graphmada;

• ongoing mine maintenance; and

• general working capital.

Company Secretary & Change of Address

Bass was pleased to announce during the quarter the appointment of Mr Angus Craig as Company Secretary, replacing Mr David Round.

Bass also advised that it had changed its head and registered office address to:

Level 22, Matisse Tower 110 Mary Street Brisbane QLD 4000 Telephone: +61 7 3063 3233

ASX listing rule 5.3 disclosures

For the quarter ended 30 June 2020, the Company had net cash outflows of $327k in exploration and evaluation activities, $370k in development activities, $209k in production activities (against receipts for sale of graphite concentrates of $334k), noting that many of the development and production costs in particular were incurred in the prior quarter/s. The total amount paid to directors of the entity and their associates in the period (item 6.1 of the Appendix 5B) was $10k for directors fees, with a further amount of $47k accrued for the quarter.

PROGRESSION OF HIGH VALUE RELATIONSHIPS

With Bass becoming a recognized producer of high carbon concentrates with a significant proportion of its production in the large flake categories, the Company has sort high value relationships to progress its integration of large scale mining and processing with downstream product manufacture.

Bass continues to explore a variety of possible collaborations across a number of new technology applications for graphite and carbons, including the high forecast growth markets of EV battery anode and expandable graphite, as well as non-graphite and nuclear applications. To date relationships have been established with Swinburne University of Technology (‘Swinburne’) and Urbix resources (‘Urbix’) as described below.

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Swinburne Partnership

The combination of the unique qualities of a weathered resource and clean large flake concentrates leave Bass well placed to participate in the development of advanced graphite applications.

As announced on 27 April 2020, the Company has signed a Memorandum of Understanding with Swinburne pursuant to which Bass and Swinburne will seek to explore opportunities for collaborative research activities, including relevant funding opportunities.

Swinburne is committed to innovative education, strong industry engagement and social inclusion. The university continues to focus on emerging technologies, industry engagement and flexible learning options.

Urbix Alliance

Bass and Urbix continued discussions during the quarter for broadening the scope of collaboration to encompass the supply of additional critical minerals for the US energy market.

While Bass and Urbix maintain their focus on expanding Bass' proven supply of high-quality graphite concentrates, the companies are considering moving forward their interest in amenable projects to meet the growing demand in the supply of critical minerals.

Critical minerals in Madagascar have high prospectivity and are materially underexplored. This lends itself to the unique strategic advantages of Bass, primarily leveraging its producer status and well-developed sustainability programs to broaden its project portfolio to meet critical mineral demand outside of China.

Management and Divestment of Tasmanian Assets

The Company continues its care and maintenance activities for its Que River tenements (CML 68M/1984, ML 10W/1980).

In recent discussions with the Department of State Growth, the Company has agreed that within this calendar year it will submit a newly revised Closure Strategy. The Closure Strategy, once agreed upon, will form the basis of a Decommissioning and Rehabilitation Plan (DRP) required by Condition DC5 of Permit Conditions – Environmental No. 7432. Through implementation of this

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plan the Company is seeking permanent closure of the Que River site and subsequent release from permit CML 68M/1984 and its obligations.

SUMMARY

Over the last 4 years Bass has made significant progress towards its objective of developing a large scale mining and processing operations at the Graphmada Mine Complex in Madagascar. During this period Bass has met several key milestones including:

• the total rebuild and recommissioning of the mine and supporting infrastructure;

• 18 months of continuous production;

• the establishment of a consistent sales channels for Bass Product;

• an enviable record for the quality of its concentrates with no tonne being penalized or rejected;

• establishing a large and growing regolith hosted resource;

• gaining of detailed production experience; and

• and excellent safety and community relations record.

Over the coming quarters, the Company will:

• progress its studies for Stage 2;

• continue exploration and resource development;

• progress collaborations for production of advanced carbon materials; and

• work on establishing binding offtake agreements for Stage 2 volumes

The strategy as outlined enables the Company to continue its progress towards its overarching aim, the establishment of large scale mining and processing with integrated downstream product manufacture.

For more information, please contact:

Tim McManus Peter Wright Chief Executive Officer Executive Director

Phone: (07) 3063 3233 Email: InvestorRelations@bassmetals.com.au Website: www.bassmetals.com.au

This announcement has been approved by the Company’s Disclosure Committee for release.

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MINERAL RESOURCES & EXPLORATION STRATEGY

Bass is of the view that there is significant value for shareholders in the expansion of the Graphmada Mineral Resource given it has been commercially proven to produce concentrates that have been sold into all major markets.

With the long-held view that significant additional graphite mineralization exists in the broader Graphmada area, in 2019 the Company, with an extensive data set of historical exploration, announced a brownfields Exploration Target estimate of 86-146 Million tonnes between 4-6% Total Graphitic Carbon (TGC) , in accordance with the JORC Code (2012)[2] .

This Exploration Target is in addition to the already substantial regolith hosted large flake graphite Mineral Resource[3] of 14.3 Mt @ at 4% TGC , estimated in accordance with the JORC Code (2012).

Mineral Resources for Graphmada Mining Complex[4][5]

Total	Tonnes	TGC	Contained Graphite
Measured	0.4 Mt	4.1%	16 Kt
Indicated	4.0 Mt	4.3%	172 Kt
Inferred	9.9 Mt	3.9%	386 Kt
Total	14.3 Mt	4.0%	574 Kt

Bass subsequently initiated exploration activities leading to the discovery of a larger trend of mineralization extending the 4.5km between the Loharano and Mahela deposits (the “Mineralized Trend”) in which the Mangabe Deposit is also located.

Important Note: An Exploration Target is a statement or estimate of the exploration potential of a mineral deposit in a defined geological setting where the statement or estimate, quoted as a range of tonnes and a range of grade, relates to mineralization for which there has been insufficient exploration to estimate a Mineral Resource. The potential quantity and grade of the Exploration Target is conceptual in nature, there has been insufficient exploration to estimate an additional Mineral Resource and it is uncertain if further exploration will result in the estimation of an additional Mineral Resource.

2 ASX Announcement “Significant Exploration Program to commence at Graphmada” released 3 June 2019.

3 ASX Announcement “Bass increases Mahefedok North graphite resource by 54%” released 25 November 2019 and ASX Announcement “Bass delivers outstanding increase in Mineral Resources” released 4 December 2019.

4 Reported in accordance with the 2012 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (‘the JORC Code 2012’) See ASX Announcement ‘Bass delivers outstanding increase in Mineral Resources’ released on the 4/12/19.

3 The Loharano Mineral Resource that forms part of the Company’s Mineral Resources herein was 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 should be made to the Company's announcement of 2/09/15, for further detail.

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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	Tenement / Permits	Interest
Australia Madagascar Madagascar Madagascar Madagascar Madagascar Madagascar	Tasmania Antsinanana Antsinanana Antsinanana Antsirabe Antsirabe Antsirabe	CML 68M/1984 Que River Mine Lease PE 25600 Loharano (East) PE 26670 Mahefedok PE 24730 Andapa PRE 4383 PE 11545 PE 39808	100% 100% 100% 100% 100% 100% Mineral Rights

Notes - Intec Limited holds a 2.5% NSR Royalty over all Product from Bass’ interests in CML68M/1984.

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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, Exploration Targets 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 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.

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