GREENWING RESOURCES LTD — Interim / Quarterly Report 2020

Apr 29, 2020

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ASX Announcement 30 April 2020

--- QUARTERLY ACTIVITIES REPORT

March 2020

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

HIGHLIGHTS

• Bass continued to dry and screen product over the first quarter to 31 March. Bass sold and shipped 780mt of concentrates to 31 March and has received A$251,000 with the balance of the March quarter’s sales expected to be received in the June quarter.

• As at 31 March, Bass had a total of 241mt remaining in inventory, and subsequent to quarter end, Bass sold an additional 54mt. Bass anticipates having all inventory sold by 30 June.

• During the quarter Bass completed extensive exploration work including grab samples and a series of 1m auger holes resulting in the identification of the Mahela-Loharano Mineralization Trend. The trend is now the subject of follow up drilling with the ultimate aim to materially expand Graphmada’s Mineral Resource.

• The Mahela-Loharano Mineralization Trend is an exciting development in the Company’s pursuit of large scale mining and processing with downstream manufacture of high end carbon products.

• Bass continues with detailed feasibility studies as part of the next phase of its development. The studies aim to materially expand production with integrated downstream product manufacture, taking advantage of established infrastructure and existing sales channels.

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

• Bass achieved an extension of the Company’s Terms Sheet with Urbix Resources for a further 12 months, broadening the scope of the proposed alliance to encompass the supply of additional critical minerals for the US energy market.

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

SALES

Sales Results

During the quarter Bass sold and shipped 780mt of concentrates and collected a portion of these sales of A$251k to 31 March. Post quarter end Bass received another A$188k, with the balance expected to be receipted in the June quarter.

At 31 March Bass had unsold inventory totaling 241mt. Bass has since sold 54mt leaving a balance of 187mt. Bass are at an advanced stage to sell the remaining concentrates over the coming weeks, with this balance of inventory anticipated to be shipped over the June quarter.

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.

OPERATIONS

Sustainability

There were no Lost Time Injuries (LTI) during the quarter, with no major environmental incidents.

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

Production Guidance

As previously announced 18 December 2019 (Bass Metals Strategic Update)[1] , Bass guided for a temporary pause in mining and processing activities during the current monsoon season in Madagascar. Drying, screening and packaging

1 ASX announcement ‘Bass Metals Strategic Update’ released 18 December 2019.

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operations continued over this period and Bass, as guided, has and continues to receipt revenue.

At the time, the Company guided for full mining and processing operations to recommence in April 2020.

The Board of Directors together with Senior Management subsequently 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.

EXPLORATION

Bass has been of the view that significant additional graphite mineralization was likely to exist in the broader Graphmada area outside the currently delineated Mineral Resources.

In 2019 the Company announced a brownfields Exploration Target estimate in accordance with the JORC Code (2012)[2] . Bass subsequently initiated exploration and drilling activities at Mahefedok and the Mahela deposits, resulting in a significant expansion and upgrade of the Mineral Resources for Graphmada[3] .

Table 1: The total 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 then initiated exploration activities between the known deposits of Mahela and Loharano to test if the orientation of these orebodies was indeed a larger trend of mineralization extending the 4.5km between the deposits.

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. 2 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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As a result of this work, the Company was pleased to report, subsequent to quarters end, the identification of the Mahela-Loharano Mineralization Trend which is now targeted for follow up drilling with the aim to materially expand Graphmada’s Mineral Resource.

The identification of Mahela-Loharano Mineralization Trend was based on grab sample and auger drilling with a summary of selected grab samples results:

• OC04: 4.2 FC% - OC15: 5.0 FC% - OC23: 4.4 FC%

• OC06: 8.1 FC% - OC18: 5.4 FC% - OC24: 3.9 FC% - OC07: 4.6 FC% - OC20: 9.1 FC% - OC29: 5.3 FC% - OC09: 6.0 FC% - OC21: 4.8 FC% - OC33: 5.8 FC%

• A summary of selected 1m depth auger drilling results:

• OC09: 6.5 FC% - OC016: 2.6 FC% - OC028: 3.7 FC% - OC013: 2.1 FC% - OC017: 2.9 FC% - OC029: 2.7 FC% - OC015: 3.5 FC% - OC022: 2.1 FC% - OC031: 3.1 FC%

All results were recorded in weathered (regolith) rock, which is easily mineable and therefore amenable to large flake preservation. Regolith does not need to be drilled and blasted or crushed for feeding processing operations.

Bass is extremely encouraged by the results to date and sees the establishment of a trend between two of its existing deposits as having the potential to dramatically alter the governing parameters of the Project.

Bass’ resource is characterized by an assemblage of 90% Large Flake Graphite and above. Bass have successfully delivered and sold exceptionally clean concentrates from its resource.

These concentrates and their negligible levels of impurities are ideal for both traditional uses and a host of emerging markets for advanced graphite materials and specialty carbon products. Bass intends to establish a larger resource at Graphmada and sees this as adding significant value for shareholders.

The possible expansion of a resource characterized by a >90% assemblage of large flake graphite and a demonstrated history of producing concentrates over an extended period of time is of great value to the Company and will further strengthen Bass’ strategic objectives.

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The mineralization trend is now targeted for follow up drilling with the aim to materially expand Graphmada’s Mineral Resource to further underpin the Company’s large scale mining and processing strategy.

Loharano-Mahela Trend showing selected mineralization results over 4.5km.

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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.

CORPORATE

Cost Reductions

Bass had previously guided for a restart to production at the end of April. With the subsequent onset of Covid19 and its resultant restrictions to international business, the Company made the decision to defer production for the foreseeable future and implemented a significant cost reduction program.

The Company will now seek to maximizes the Company’s progress at minimal cost.

The strategy will see Bass accelerate work on the definitive feasibility study for Stage 2 capitalizing on the achievements of Stage 1 and the invaluable intellectual capital gained in the processing of graphite. Most importantly the Company will focus on improvements in performance and reliability.

Bass will continue exploration and will continue to expand its resource and high quality feedstock to support the studies for Stage 2.

Key outcomes of the cost reduction program include:-

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• Malagasy workforce reduced from 230 to 60 (74% reduction)

• Expat workforce reduced from 4 to 1 (75% reduction)

• Directors and Senior Management salary reductions between 20 and up to 35%.

Subsequent to the end of 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).

With production suspended, the Company has reduced fuel expenses , its single largest cost, by 94%.

These measures, which are now fully implemented in Madagascar inclusive of redundancy payments and nearing conclusion in Australia, will see a dramatic reduction in the Company’s running costs while it advances its strategy.

Company Secretary & Change of Address

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

Mr Craig is a Brisbane based, experienced public company CFO and Company Secretary, with over 25 years of corporate experience across a range of industries and businesses. Mr Craig has significant experience in corporate governance, financial management, ASX related matters, equity funding and corporate transactions.

Bass also advises that it has changed it head and registered office address to:

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

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.

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Urbix Alliance

The Company announced during the quarter an extension of its Terms Sheet with Urbix Resources (“Urbix”) for a further 12 months in order to develop an alliance with the company for long-term value creation on behalf of their shareholders. Bass and Urbix are discussing broadening the scope of their work 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.

Swinburne Partnership

Subsequent to quarter’s end, the Company signed a Memorandum of Understanding with Swinburne University of Technology (“Swinburne”) pursuant to which Bass and Swinburne will work to form a long-term collaborative partnership in areas of mutual benefit.

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.

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.

Swinburne is at the forefront of Industry 4.0 through advanced digitalization capabilities including industrial automation, Internet of Things, big data and artificial intelligence, smart sensors, autonomous systems, and new-generation processes and materials

Swinburne and Bass will seek to explore opportunities for collaborative research activities, including relevant funding opportunities. The specific areas of interest

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that will form the initial stages of discussion and likely collaborative activities include but are not limited to:

• Industry 4.0 (I4.0) capabilities and collaboration within the Advanced Manufacturing I4.0 Hub (factory of the future) and the I4.0 readiness assessment program

• Collaboration with the Graphene Certification Lab looking at the supply chain and certification needs

• Use of advanced materials to research and develop sustainability initiatives and to help establish and strengthen downstream product manufacturing

• Advanced manufacturing of composites and accessing the expertise of Swinburne's Industry 4.0 Testlab, which will demonstrate a pilot-scale cyberphysical production system

• Use of multidisciplinary knowledge (such as materials science; engineering; data analytics; simulation) to look at diversified critical mineral and carbon materials to meet different growth sector's needs on a global scale (composite materials, graphene-oxide based supercapacitors, and alternate energy storage)

Bass continues to explore a variety of other 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 new age graphene and nuclear applications.

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

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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 saprolite hosted resource;

• gaining of detailed production experience; and

• and excellent safety and community relations record.

Over the coming quarters, the Company will:

• progress its definitive feasibility study for Stage 2;

• continue exploration;

• continue to progress discussions to establish a pathway to 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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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 Australia Madagascar Madagascar Madagascar Madagascar Madagascar Madagascar	Tasmania Tasmania Antsinanana Antsinanana Antsinanana Antsirabe Antsirabe Antsirabe	CML 68M/1984 Que River Mine Lease 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% 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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