GREENWING RESOURCES LTD — Interim / Quarterly Report 2020

Feb 2, 2020

ASX Announcement 31 January 2020

--- QUARTERLY ACTIVITIES REPORT

December 2019

Bass Metals Limited (ASX: “BSM”) (“Bass” or the “Company”) is pleased to provide this quarterly report as it continues its progression towards establishing large scale mining and processing operations at its wholly owned Graphmada Mining Complex in Madagascar.

HIGHLIGHTS

• Bass sold and shipped on an FOB[1] basis 1,011mt of concentrates, a new quarterly record, with the Company also achieving record quarterly sales revenue of A$671k.

• Record quarterly sales for December leave a healthy forward order book of 804mt to be shipped over the March quarter, with a noticeable improvement in concentrate price in 2020 compared to 2019.

• Bass delivered a material upgrade in JORC Code (2012) classification for the Mahefedok Mineral Resource, which now stands at 4.2 Million at 4.2% Total Graphitic Carbon (TGC) and completed an estimate in accordance with the JORC Code (2012) for a maiden Mineral Resource at the Mahela Deposit of 4.4Mt at 3.8% TGC. This program resulted in an outstanding 44% increase in total Mineral Resources for Graphmada, which now stands at 14.3mt at 4% TGC.

• The Company agreed to terms and subsequent to quarter end, completed the sale of its Hellyer base metal rights and Mt. Block permit in Tasmania for a total consideration of $360,000 plus return of its $110,000 security bond further lowering the Company’s monthly operating costs.

1 Free On Board (The buyer pays the cost of marine freight transport, insurance, unloading, and transportation from the arrival port to the final destination)

• 708 wet tonnes were produced for the quarter at a large flake distribution (>180 microns) of 42% and average final concentrate grade of 91% FC.

• Bass received subscription commitments for a further $1.195m being the balance remaining of the convertible notes raising leaving the Company with over $3m cash and receivables at quarters end.

SALES

Sales Results

During the December quarter Bass sold and shipped on an FOB basis 1,011mt, a new quarterly record, with the Company also achieving record quarterly sales revenue of A$671k.

This strong performance has left Bass well placed to continue generating revenue with a forward order book at December 31[st] of 804mt. Bass has continued sales into 2020, with a substantial volume of concentrates under contract and a noticeable improvement in concentrate price in 2020 compared to 2019.

With Bass completing its first and substantial shipment of graphite concentrates into China during the month of November, the Company has achieved a key milestone in selling its concentrates into all key markets.

Importantly, Bass has yet to have a single tonne rejected or penalized for quality since production was recommissioned.

OPERATIONS

During the quarter Bass made the decision to implement a seasonal production strategy, pausing mining and front-end processing in December ahead of the monsoon season. Previously, Bass maintained full operations throughout the wet season, but with the 2019 monsoon season delivering record rainfall and

subsequently modest production and a material operating loss, Bass revised its production strategy to minimize its exposure to this risk.

Bass is continuing back-end processing operations, with drying and screening of wet product from the December quarter generating further revenue and ultimately growing the forward order book.

Health, Safety, Environment and Community

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 Results

During the quarter 26,755 tonnes of ore were processed at an average Head Grade of 4.2% Fixed Carbon (FC), resulting in production of 708 wet tonnes at a large flake distribution (>180 microns) of 42% and average final concentrate grade of 91% FC.

Production Metrics[2]

oduction Metrics2	oduction Metrics2
Qtr. Head Grade Recovery Tonnes Produced Large Flake % Carbon Grade
FY Q1	4.6% 70% 1,128 42% 92%
FY Q2	4.2% 60% 708 42% 91%
FY 2020	4.4% 66% 1,836 42% 92%

2 Figures tabled are subject to rounding.

Production Outlook

Bass will continue exporting and generating revenue with back-end processing operations producing throughout the quarter, with full operations planned to recommence post the wet season, subject to conditions.

EXPLORATION

Bass Metals, as previously announced, has elevated to a core objective a material expansion of its graphite resources to support large scale mining and processing. The Company’s strategy, as it works towards developing high value partnerships downstream, is to grow its operations to become a globally significant producer of large flake concentrates and high value products such as purified and expandable graphite.

In progressing this strategy, Bass has delivered, via 1,092m of diamond drilling and sampling, a material upgrade in JORC Code (2012) classification for the Mahefedok Mineral Resource during the quarter. Mahefedok Mineral Resource now stands at 4.2Mt at 4.2% TGC, containing a combined Measured and Indicated Resources of 1.6Mt at 4.3% TGC.

In parallel, and in support of Bass’ long held view that the graphite mineralization across its permits is extensive and sufficient to support its strategy, the Company announced the completion of 113 drill holes at the Mahela Deposit, all recording consistent large flake graphite mineralization to an average depth of 42m. The regolith hosted mineralization is soft and easily mineable, important for liberating large flake. Over half of the holes drilled reported significant grade intercepts of >4% TGC.

Graphite flakes of up to 7,000 microns in size were geologically logged with the deposit remaining open in all directions and to depth, providing a sound basis to conduct further drilling and development.

Subsequent to the receipt of sample analysis data, the Company completed a maiden Mineral Resource at Mahela estimated in accordance with the JORC Code (2012) of 4.4 Million Tonnes (Mt) at 3.8% TGC, elevating the total Mineral Resources at Graphmada Mining Complex by an outstanding 44% for 2019.

Bass now has identified approximately 574kt of contained graphite at Graphmada which will facilitate, progressing its core objective of shifting from its current production profile to >20kt per annum production, with significant mine life.

Table 1: The total Mineral Resources for Graphmada Mining Complex[3][4] .

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 continues to materially and aggressively explore its Permits within the region to realize Graphmada’s true potential as a stand-alone large flake graphite producer. As such, Bass will conduct further drilling at Mahela in early 2020 with the aim to add additional resource and also to explore the mineralization trend between the Loharano and Mahela deposits, a trend with a known strike length of approximately 4 kms.

3 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.

Mahela core showing extensive large flake graphite mineralization.

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PROJECTS

Having announced additional Mineral Resources[5] during the quarter, Bass commenced studies for large scale mining and processing operations. As a precursor to concluding these detailed feasibility studies with the input of external parties, the Company completed a 300-page in-house study in support of large scale production. The work included integration with a potential advanced carbon products manufacturing facility based in Tamatave, the major export port of Madagascar.

The feasibility studies, to be completed by the end of 2020, will focus on key items proposed to reduce operating costs and materially grow production with market demand at the lowest possible capital intensity. Bass looks forward to providing investors with:

• Definitive cost of production (C1, C2, C3, AISC)

• Definitive capital expenditure

• Ore Reserve (along with expanded resource)

• Product breakdown

• Binding sales contracts

• Net present value of the project (NPV)

• Internal rate of return (IRR)

5 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. 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.

Key focus areas of the feasibility studies will include:

• Hydraulic Mining - as one of the lowest operating cost methods of mining, hydraulic mining provides operations minimal disruption from the monsoonal impacts, while negating capital expenditure on haul roads and associated haulage infrastructure, including extra fleet capacity. By slurrying the ore to a series of modular process plants, hydraulic mining will also reduce the need for a complex all-weather feed system for processing or a seasonal production strategy. The Company expects to deliver the results of this work in the first quarter of 2020.

• Processing - Bass intends to finalize detailed designs for a proprietary modular processing system based on the extensive knowledge and expertise collected and fully retained within the Company over the last 3 years of construction commissioning and subsequent production. With additional Mineral Resources, the ability to either increase mine life or scale up operations via additional modular plants provides maximum strategic advantage to meet growing market demand. The Company will engage external consultants to assist with completing the design and expects results in the second quarter of 2020.

• Drying and Packaging – studies will consider drying and packaging operations to be centralized to grid power in Tamatave, including supporting services such as administration, laboratory analysis and logistics. Haulage of wet tonnes to a centralized drying and packaging plant with its own truck fleet will see Bass significantly reduce logistic costs and simplify its operational footprint to allow maximum strategic optionality across the region. These proposed drying and packaging operations will also be capable of toll treatment of third-party wet concentrates, ensuring Bass becomes the key strategic player in the Madagascan graphite industry. Importantly, existing customers and potential technology partners have already signalled their interest in supporting this initiative with offtake discussions to be progressed in parallel with the studies. The establishment of these operations in Tamatave are also seen as the prelude to the manufacture of specialty

carbon products at scale. The Company plans to complete this component of the studies in the second quarter of 2020.

• Tailings Storage - with hydraulic mining, the ore and waste are separated at the front end of the modular process plant, where the waste heads to tailings as a significantly dewatered slurry. The water is then recycled to hydraulic mining operations as part of the Company’s strong sustainability focus. While this will increase the amount of tailings to be stored, this approach negates the design and building of a waste dump. With the likely tailings deposition to be backfilling of existing voids and pits into relatively flat farmable plots, the plan will provide a sustainable solution for beneficial use of the land long after mining has ceased. The Company envisages this work will be completed post the hydraulic mining and processing work and will be made available in the third quarter of 2020.

• Mine Planning - a key component of any feasibility study is integrating studies such as the above into a single mine plan that generates Ore Reserves in accordance with the JORC Code (2012). With an expected significant decrease in operating costs, Bass is aiming to review various operational parameters and inputs such as head grade and recovery to determine the most suitable cut-off grade for Mineral Resource and Ore Reserve estimation. Mining planning will also ensure the most optimal resource is mined sequentially in order to maximize revenue and subsequently, returns to shareholders. This work will incorporate environmental impact studies based on a revised mining and processing methods. The Company seeks to complete this work in the fourth quarter of 2020.

On completion, and before submission for Large Project Status under Malagasy Mining Law, an independent peer review will be tabled to ensure the quality of the feasibility study’s results. The study in its entirety is expected to be completed by the end of 2020.

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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.

Bass has several crucial elements already in place, with an operating mine and has advanced several other factors.

The key benefits of the LMIC include:

• Reduction of the royalty fee to 1%

• Duty-free import of all project equipment and material

• Reduced general tax regime

• Stability guarantees concerning legislation

• Rights and guarantees to foreign currency including offshore accounts

• Warranties concerning foreign workers

Post feasibility studies, Bass anticipates a number of months preparation for the submission of the Company’s application process. Once submitted at the ‘Commission des Grands Investissements Minier’ the application has a set timeframe for regulatory approval of 60 days.

CORPORATE

Finance

During the quarter, Bass received subscription commitments for a further $1.195m being the balance remaining of the convertible notes raising leaving the Company with over $3m cash and receivables at quarters end. The funding will allow Bass to advance detailed feasibility studies and further exploration without the need to raise equity capital in the near future.

Progression of high value partnerships

With Bass an established producer of high quality concentrates with a significant proportion of its production in the large flake categories, the Company has sort high value partnerships, such as recent discussions with Urbix Resources (Urbix). Urbix has an advanced process for cost-effective upgrading of flake graphite to very high levels without loss of flake size or cash margins. Since Bass' concentrates have tested to be highly applicable for lithium battery, expandable and potentially graphene applications, the Urbix process is especially suitable.

The Company continues JV discussions with Urbix, with Jeff Marvin (Director) and Rick Anthon (Chairman) recently visiting Urbix’s leadership in Arizona. Bass

and Urbix confirm that talks are materially progressing towards signing a JV agreement in the near term.

Bass is also exploring a variety of potential 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

Within the December quarter, the Company was pleased to announce that it had agreed to terms with NQ Minerals Plc for the sale of its Hellyer base metal rights and Mt. Block permit in Tasmania for a total consideration of $360,000 plus return of its $110,000 security bond.

There were no conditions precedent for the completion of the agreement, which was subsequently completed post quarter end.

The transaction did not include the Que River tenements (CML 68M/1984, ML 10W/1980) for which the Company continues its care and maintenance activities.

SUMMARY

The long-term strategy at Graphmada has been to establish a significantly derisked platform to progress to the Company’s ultimate strategic goal of large scale mining and processing, with integrated downstream product manufacture. Bass in establishing this robust operational platform have delivered the following:

• Sustainable production of premium large flake graphite concentrates (42% >180 microns over two consecutive quarters)

• Strong sales channels established with the successful entry of Bass’ product in the market with multiple customers and no concentrates rejected or penalized

• Exploration and development success, with an increase in Mineral Resources by over 150% with significant upside potential remaining

• Invaluable graphite processing intellectual property developed and retained

• Establishment of key relationships both locally and federally via strong stakeholder engagement and significant investment and employment of local communities

Complimenting these achievements, Bass has established long term:

• permitting and land ownership over its projects (40-years and 20-years respectively)

• efficient infrastructure both at mine and port, including warehouse facilities

• a best practice safety and health culture amongst its workforce

• sustainable environmental practices and standards

Bass continues its tragectory towards its strategic objectives, capitalizing on its progress to date and retained expertise to progress studies for materially higher production at anticipated lower operating costs and capital intensity per tonne.

For more information, please contact:

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

This ASX release was authorized on behalf of the Bass Metals Board of Directors by Rick Anthon, Non-Executive Chairman.

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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.

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 forwardlooking 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 Mineral Resources, Exploration Targets and 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 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.