HAMMER METALS LIMITED — Capital/Financing Update 2017

Dec 17, 2017

(ASX: HMX)

ASX Announcement

18 December 2017

EXPLORATION UPDATE

High Grade Copper-Gold Mineralisation at Jubilee

High-grade copper and gold intersections returned in initial assay results from the Jubilee Prospect within the Mt Frosty Joint Venture with MIM. Further significant intersections indicated from Portable XRF results.

• Significant results include:

• 6 metres at 2.55% Copper and 1.25g/t Gold from 60 metres in HJRC003 with peak assays of 4.46% Copper and 1.81g/t Gold (Laboratory Assays).

• 3 metres at 4.91% Copper and 5.73g/t Gold from 26 metres in HJRC006 within an envelope of 6 metres at 2.69% Copper and 2.89g/t Gold from 23 metres. Peak assays of 9.29g/t Gold and 9.17% Copper (Laboratory Assays).

• 5 metres at 4.86% Copper from 35 metres within an envelope of 26 metres at 1.05% Copper from 18 metres in HJRC009. Peak reading of 7.18% Copper (Portable XRF with Laboratory Assays pending).

• Jubilee is located within 2 kilometres of the Barkly Highway and 60 kilometres from Mount Isa.

• Further assays pending.

Hammer Metals Limited (Hammer or the Company) (ASX: HMX) is pleased to advise that 9 RC holes of the phase 1 program have now been drilled at the Jubilee copper-gold target. As reported on December 8, visible sulphide mineralisation was observed in the majority of holes with the exception of HJRC001 and HJRC004. (Refer to ASX release dated December 8[th] , 2017).

The observed sulphide mineralisation is quartz vein related, broadly conformable to the dominant foliation (observable in the host rock) and is composed of chalcopyrite (a copper sulphide), pyrite and pyrrhotite (both iron sulphide minerals). The Company has compiled a summary at Table 1 to provide context for mineral observations in relation to the visible sulphides. Portable XRF analysis conducted on-site confirmed the visual observations and quantitatively estimated the proportion of copper in the sulphide-bearing intervals. (Refer to Table 3).

Laboratory assays have since been received for drillholes HJRC001 to HJRC007. (Refer to Table 2.) Significant intersections include:

• 6 metres at 2.55% Copper and 1.25g/t Gold from 60 metres in HJRC003 with peak values over a one metre interval of 4.46% Copper and 1.81g/t Gold.

• 3 metres at 4.91% Copper and 5.73g/t Gold from 26 metres in HJRC006 within an envelope of 6 metres at 2.69% Copper and 2.89g/t Gold from 23 metres. Peak assays of 9.29g/t Gold and 9.17% Copper.

• 2 metres at 1.10% Copper and 1.08g/t Gold from 31 metres in HJRC002 with peak values of 1.44% Copper and 1.35g/t Gold.

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Portable XRF (PXRF) analyses were conducted on all samples prior to submission to the assay laboratory. The technique is useful to determine the approximate copper tenor but cannot be used for gold. Significant portable XRF intersections from holes currently being analysed at the lab include:

• 5 metres at 4.86% Copper within an envelope of 26 metres at 1.05% Copper from 18 metres in HJRC009 with a peak value of 7.18% Copper.

Refer to Table 3 for additional PXRF results. It is expected that final laboratory reporting will occur in approximately two weeks. Drilling will resume at Jubilee in Q1 2018.

The Mt Frosty JV over EPM 14467 is located adjacent to the Mary Kathleen Uranium Mine, 60km east of Mount Isa and covers the Mary Kathleen Shear Zone that hosts several copper-gold, uranium and REE prospects including Jubilee, Koppany and Blue Caesar.

Under the terms of the Joint Venture Agreement with Mount Isa Mines Limited (MIM - a 100% owned subsidiary of Glencore PLC) each Party to the Joint Venture will contribute exploration expenditure according to their participating interest (HMX - 51% / MIM – 49%). Hammer is managing the exploration activities.

Table 1: Visible Sulphide Observations for drillholes HJRC001 to HJRC009

Jubilee Prospect - 2017 Joint Venture Drilling - Visible Sulphide Observations	Jubilee Prospect - 2017 Joint Venture Drilling - Visible Sulphide Observations	Jubilee Prospect - 2017 Joint Venture Drilling - Visible Sulphide Observations
Hole ID	Observation	Nature
HJRC001	No visible mineralisation reported
HJRC002	10m @ 1% Cpy & 1.5% Py from 23m	Disseminated
HJRC003	17m @ 1.5% Cpy & 1% Py from 49m, Incl. 6m @ 3% Cpy & 1% Py	Vein related
HJRC004	No visible mineralisation reported
HJRC005	7m @ 1% Cpy & 1% Py from 51m	Vein related
HJRC006	5m @ 2% Cpy & 2% Py from 24m, Incl. 2m @ 4% Cpy & 1% Py	Vein related
HJRC007	4m @ 3.5% Cpy & 1.5% Py from 16m, Incl. 2m @ 5% Cpy & 2% Py	Vein related
HJRC008	2m @ 2% Cpy & 2% Py from 26m	Vein related
HJRC009	10m @ 8% Cpy from 30m, Incl. 4m @ 18% Cpy	Vein related
Note
Cpy - Chalcopyrite, Py-Pyrite

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Table 2: Laboratory assay intersections (at 0.1% copper cut-off) for drillholes HJRC001 to HJRC007

==> picture [431 x 458] intentionally omitted <==

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Table 3: Portable XRF copper intersections (at 0.1% copper cut-off) for all drillholes

Jubilee Prospect - 2017 Joint Venture Drilling - Portable XRF Analyses	Jubilee Prospect - 2017 Joint Venture Drilling - Portable XRF Analyses	Jubilee Prospect - 2017 Joint Venture Drilling - Portable XRF Analyses	Jubilee Prospect - 2017 Joint Venture Drilling - Portable XRF Analyses	Jubilee Prospect - 2017 Joint Venture Drilling - Portable XRF Analyses	Jubilee Prospect - 2017 Joint Venture Drilling - Portable XRF Analyses	Jubilee Prospect - 2017 Joint Venture Drilling - Portable XRF Analyses	Jubilee Prospect - 2017 Joint Venture Drilling - Portable XRF Analyses	Jubilee Prospect - 2017 Joint Venture Drilling - Portable XRF Analyses	Jubilee Prospect - 2017 Joint Venture Drilling - Portable XRF Analyses	Jubilee Prospect - 2017 Joint Venture Drilling - Portable XRF Analyses	Jubilee Prospect - 2017 Joint Venture Drilling - Portable XRF Analyses	Jubilee Prospect - 2017 Joint Venture Drilling - Portable XRF Analyses
Hole_ID	East(1)	**North(1) **	**RL(2) **	**Dip **	**Az_Grid **	TD		**From **	**To **	**Int **	Cu_% (3)	Comment
HJRC001	396670	7699847	394	-55	80	72		21	24	3	0.15	Laboratory Assays reported (see table 1)
								34	37	3	0.97
								45	51	6	0.17
HJRC002	396669	7699895	392	-55	59	54		13	15	2	0.5
								26	36	10	0.43
							incl.	32	33	1	1.1
HJRC003	396652	7699889	391	-60	70	84		46	65	19	0.68
							incl.	**60 **	65	5	2.22
HJRC004	396668	7700192	403	-60	80	72		11	15	4	0.71
							incl.	12	13	1	1.69
HJRC005	396633	7700187	406	-60	80	78		53	59	6	0.37
HJRC006	396673	7700141	404	-60	80	66		9	10	1	0.11
								**23 **	31	8	1.26
							incl.	**26 **	29	3	2.96
								53	54	1	0.13
HJRC007	396690	7700096	399	-60	80	54		8	19	11	0.42
								16	19	3	1.22
							incl.	**17 **	18	1	2.16
HJRC008	396663	7699961	399	-55	60	84		16	29	13	0.19	Laboratory Assays pending
								26	28	2	0.68
HJRC009	396660	7699934	397	-55	80	66		2	3	1	0.11
								**18 **	**44 **	26	1.05
							incl.	**33 **	41	8	3.19
							incl.	**35 **	40	5	4.86
NOTE
(1)- Positions relative to GDA94,Zone 54
(2)- RL derived from a Laser Scanner - Drone Hybrid DEM
(3)- Copper analyses dervied usinga Olympus Vantaportable XRF

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==> picture [439 x 288] intentionally omitted <==

HJRC006 - 3 metres at 4.91% Copper and 5.73g/t Gold from 26 metres within an envelope of 6 metres at 2.69% Copper and 2.89g/t Gold from 23 metres. Peak values of 9.29g/t Gold and 9.17% Copper (Laboratory Assays).

==> picture [433 x 227] intentionally omitted <==

HJRC009 33 – 40 metres with visible pyrite, pyrrhotite and chalcopyrite. 5 metres at 4.86% copper from 35m was reported from portable XRF analyses. This zone occurred within a broader envelope of 26 metres at 1.05% copper from 18 metres. Peak portable XRF response of 7.18% Copper. Laboratory assays are pending.

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Hammer Metals Limited (ASX: HMX) Hammer Metals holds a strategic tenement position covering approximately 3000km[2] within the Mount Isa mining district, with 100% interests in the Kalman (Cu-Au-MoRe) deposit, the Overlander North and Overlander South (Cu-Co) deposits, the Millennium (Cu-Co-Au) deposit as well as the recently acquired Elaine-Dorothy (Cu-Au) deposit. Hammer is an active mineral explorer, focused on discovering large copper-gold deposits of the Ernest Henry style and has a range of prospective targets at various stages of testing.

For further information, please contact:

Alex Hewlett | Executive Director & CEO Russell Davis | Executive Chairman info@hammermetals.com.au M: +61 (0) 419195087

Competent Person’s Statement:

Exploration Results

The information in this report as it relates to exploration results and geology was compiled by Mr. Mark Whittle, who is a Member of the AusIMM and a consultant to the Company. Mr. Whittle who is a shareholder and optionholder, has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking 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'. Mr. Whittle consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.

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==> picture [320 x 610] intentionally omitted <==

Jubilee Prospect with planned and completed drillhole positions

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==> picture [457 x 493] intentionally omitted <==

Mount Isa Project

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JORC Code, 2012 Edition

Table 1 report – Mt Frosty Joint Venture Drilling Update

• This table is to accompany an ASX release updating the market with results as they are reported from the Jubilee copper-gold prospect which is located at the Mt Frosty (EPM14467) joint venture with Mount Isa Mines Limited.

• The drilling is being conducted by Hammer Metals Limited on behalf of the Joint Venture.

• Both portable XRF and laboratory assays are reported. Lab analyses are still pending for HJRC008 and HJRC009.

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections in this information release.)

Criteria	JORC Code explanation	Commentary	Commentary
Sampling	• Nature and quality of sampling (eg cut	DRILLING HJRC001-HJRC009
techniques	channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc).	•	Reverse circulation (RC) drill chip samples were taken at four metre intervals but where significant mineralisation was encountered the sample length was reduced to 1m.
	These examples should not be taken
	as limiting the broad meaning of
	sampling.
	• Include reference to measures taken	•	All samples to be submitted for assay
	to ensure sample representivity and		underwent a fine crush with 1kg riffled
	the appropriate calibration of any		off for pulverising to 75 micron.
	measurement tools or systems used.
	• Aspects of the determination of
	mineralisation that are Material to the
	Public Report. • In cases where ‘industry standard’ work has been done this would be relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases, more	•	Samples have been submitted for 4 acid digest followed by AAS assay for gold and ICP (MS and OES) analysis for a multi-element suite including copper, silver, cobalt and molybdenum. The samples will also analysed for rare earth elements.
	explanation may be required, such as where there is coarse gold that has	•	No assay results have been received.
	inherent sampling problems. Unusual
	commodities or mineralisation types
	(eg submarine nodules) may warrant
	disclosure of detailed information.
Drilling	• Drill type (eg core, reverse circulation,	•	Holes were drilled by Overland
techniques	open-hole hammer, rotary air blast,		Drilling utilising a UDR1200 truck-
	auger, Bangka, sonic, etc) and details		mounted rig.
	(eg core diameter, triple or standard	•	Holeswere drilling usingreverse

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Criteria	JORC Code explanation	Commentary	Commentary
	tube, depth of diamond tails, face-		circulation technique with a face
	sampling bit or other type, whether		sampling hammer.
	core is oriented and if so, by what
	_method, etc). _
Drill	• Method of recording and assessing	•	Sample recoveries were generally in
sample	core and chip sample recoveries and		excess of 90%. Exceptions being in
recovery	results assessed.		the shallow portion of holes where
	• Measures taken to maximise sample		recoveries could drop over short
	recovery and ensure representative		distances.
	nature of the samples.
	• Whether a relationship exists between sample recovery and grade and	•	No sample recovery bias was noted.
	whether sample bias may have
	occurred due to preferential loss/gain
	of fine/coarse material.
Logging	• Whether core and chip samples have	•	All drill chips were geologically logged
	been geologically and geotechnically		in detail by Hammer Metals Limited
	logged to a level of detail to support		Geologists.
	appropriate Mineral Resource estimation, mining studies and metallurgical studies. • Whether logging is qualitative or	•	Samples were collected for every metre, stored in chip trays and photographed.
	quantitative in nature. Core (or	•	Every drilled metre was qualitatively
	costean, channel, etc) photography.		logged for geology and quantitatively
	• The total length and percentage of the		logged using a Olympus Vanta
	relevant intersections logged.		portable XRF instrument and
			magnetic susceptibility meter.
Sub-	• If core, whether cut or sawn and	•	Samples consist of RC drill chips.
sampling techniques and sample preparation	whether quarter, half or all core taken. • If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. • For all sample types, the nature,	•	Sample collection methodology and size is considered appropriate to the target-style, and appropriate laboratory analytical methods were employed.
	quality and appropriateness of the	•	Standard reference samples and
	sample preparation technique.		blanks were each inserted into the
	• Quality control procedures adopted for		laboratory submissions at a rate of 1
	all sub-sampling stages to maximise		per 25 samples.
	representivity of samples. • Measures taken to ensure that the sampling is representative of the insitu material collected, including for instance results for field	•	Two duplicate samples (a 1m sample and a 4m composite sample) were taken from each drillhole and inserted at the end of the drillhole sample
	duplicate/second-half sampling.		sequence.
	• Whether sample sizes are appropriate	•	The sample sizes submitted for
	to the grain size of the material being		analysis were appropriate for the style
	sampled.		of mineralisation sought and for the
			sampled grain size.
Quality of	• The nature, quality and	•	All drilling samples will be analysed by
assay data	appropriateness of the assaying and		ALS for a range of elements by ICP
and	laboratory procedures used and		(OES andMS) aftera4-acid digest.

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Criteria	JORC Code explanation	Commentary
laboratory	whether the technique is considered	Gold was analysed via flame AAS. No
tests	partial or total.	assay results from Jubillee have been
	• For geophysical tools, spectrometers,	received to date.
	handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc. • Nature of quality control procedures adopted (eg standards, blanks,	•Standard reference samples and blanks were inserted at 25 sample intervals. ALS also maintained a comprehensive QAQC regime, including check samples, duplicates, standard reference samples, blanks and calibration standards.
	duplicates, external laboratory checks)
	and whether acceptable levels of
	accuracy (ie lack of bias) and precision
	_have been established. _
Verification	• The verification of significant	•All intercepts have been verified by
of	intersections by either independent or	alternate company personnel
sampling and	alternative company personnel. • The use of twinned holes.	•These holes have not been twinned.
assaying	• Documentation of primary data, data	•All field logging will be checked and
	entry procedures, data verification,	entered into the company database.
	data storage (physical and electronic) protocols. • Discuss any adjustment to assay data.	•Assay files will be received electronically from the laboratory.
		•Intercepts which contain an analysis
		below the detection limit are calculated
		using an adjusted value which is half
		the listed detection.
Location of	• Accuracy and quality of surveys used	•Drill hole collars were measured using
data points	to locate drill holes (collar and down-	a hand-held GPS unit with an
	hole surveys), trenches, mine workings	estimated positional accuracy of
	and other locations used in Mineral	approximately 5 metres.
	Resource estimation. • Specification of the grid system used.	•Datum used is UTM GDA 94 Zone 54.
	• Quality and adequacy of topographic	•RL’s for the drill hole collars are initially
	control.	captured by GPS and subsequently
		adjusted. A sub-metre laser DEM
		survey has been conducted and
		drillhole RL’s are reconciled to this
		new DEM.
Data	• Data spacing for reporting of	•It is not known at this stage whether
spacing	Exploration Results.	the drill density will be sufficient to
and	• Whether the data spacing and	establish grade continuity.
distribution	distribution is sufficient to establish the
	degree of geological and grade	•Assays were taken on 1 and 4m
	continuity appropriate for the Mineral	sample lengths. 1m length was
	Resource and Ore Reserve estimation	preferred in areas of increased
	procedure(s) and classifications	mineralisation.
	applied.
	• _Whether sample compositing has been _

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Criteria	JORC Code explanation	Commentary
	_applied. _
Orientation	• Whether the orientation of sampling
of data in	achieves unbiased sampling of
relation to	possible structures and the extent to
geological	which this is known, considering the	•Drill holes were oriented as close to
structure	deposit type.	perpendicular as possible to the
	• If the relationship between the drilling	interpreted orientation of the
	orientation and the orientation of key	geophysical targets and surface
	mineralised structures is considered to	geological features.
	have introduced a sampling bias, this
	should be assessed and reported if
	material.
Sample	• The measures taken to ensure sample	•Pre-numbered bags were used and
security	security.	sample were transported to ALS
		laboratory in Mt Isa by company
		personnel.
Audits or	• The results of any audits or reviews of	•No audits or reviews of this dataset
reviews	sampling techniques and data.	have yet been undertaken.

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria	JORC Code explanation	Commentary
Mineral	• Type, reference name/number,	DRILLING (HJRC001- HJRC009)
tenement and land tenure status	location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.	•This drilling occurred on granted EPM14467 - owned by Mount Isa Mines Limited (49%) and Mulga Mining Limited (51%). Mulga Mining is a 100% owned subsidiary of Hammer Metals Limited
	• The security of the tenure held at the
	time of reporting along with any
	known impediments to obtaining a
	licence to operate in the area.
Exploration	• Acknowledgment and appraisal of	•Exploration, including RC drilling, has
done by other	exploration by other parties.	previously been carried out by
parties		Chinalco Yunnan Copper, now
		AuKing Mining Limited
Geology	• Deposit type, geological setting and	•Drillholes are located within altered
	style of mineralisation.	sediments of the Corella Formation
		on the western limb of the Mary
		Kathleen syncline.
		•The style of copper-gold
		mineralisation at Jubilee is shear-
		hosted. This style of mineralisation is
		common in the Mount Isa region and
		the closest examples ofthis style of

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Criteria	JORC Code explanation	Commentary
		mineralisation would be the nearby
		Mt Colin Deposit operated by
		CopperChem Limited.
Drill hole	• A summary of all information material	•See the attached tables.
Information	to the understanding of the
	exploration results including a
	tabulation of the following information
	for all Material drill holes:
	o easting and northing of the drill
	hole collar
	o elevation or RL (Reduced Level –
	elevation above sea level in
	metres) of the drill hole collar
	o dip and azimuth of the hole
	o down hole length and interception
	depth
	o hole length.
	• If the exclusion of this information is
	justified on the basis that the
	information is not Material and this
	exclusion does not detract from the
	understanding of the report, the
	Competent Person should clearly
	_explain why this is the case. _
Data	• In reporting Exploration Results,
aggregation methods	weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.	•Intercepts are quoted at a 0.1% Copper cut-off with included intercepts highlighting zones of increased Copper and or Gold Grade.
	• Where aggregate intercepts	.
	incorporate short lengths of high
	grade results and longer lengths of
	low grade results, the procedure used
	for such aggregation should be stated
	and some typical examples of such
	aggregations should be shown in
	detail.
	• The assumptions used for any
	reporting of metal equivalent values
	should be clearly stated.
Relationship	• These relationships are particularly	•In plan, most drill-holes are oriented
between	important in the reporting of	perpendicular to the interpreted
mineralisation	Exploration Results.	position of the modelled structural
widths and	• If the geometry of the mineralisation	features. In section, the average
intercept	with respect to the drill hole angle is	angle between the drillholes and the
lengths	known, its nature should be reported.	modelled structural features is 55
	• If it is not known and only the down	degrees.
	hole lengths are reported, there	•The drilling is not yet at a sufficient
	should be a clear statement to this	density to enable any grade
	effect (eg ‘down hole length, true	continuity to be established. The true
	_width not known’). _	width of any quoted intercept is not

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Criteria	JORC Code explanation	Commentary	Commentary
			known with any certainty.
Diagrams	• Appropriate maps and sections (with	•	See attached figures
	scales) and tabulations of intercepts
	should be included for any significant
	discovery being reported These
	should include, but not be limited to a
	plan view of drill hole collar locations
	_and appropriate sectional views. _
Balanced	• Where comprehensive reporting of all	•	Intersections derived from portable
reporting	Exploration Results is not practicable,		XRF analysis and laboratory analysis
	representative reporting of both low		are reported at cut-off grades of 0.1%
	and high grades and/or widths should		Copper.
	be practiced to avoid misleading	•	The reader can therefore assume
	reporting of Exploration Results.		that any areas within a drillhole that
			are not quoted in the intercept tables
			contains grades less that the quoted
			cut-off.
Other	• Other exploration data, if meaningful	•	Refer to the release.
substantive	and material, should be reported
exploration	including (but not limited to):
data	geological observations; geophysical
	survey results; geochemical survey
	results; bulk samples – size and
	method of treatment; metallurgical
	test results; bulk density,
	groundwater, geotechnical and rock
	characteristics; potential deleterious
	_or contaminating substances. _
Further work	• The nature and scale of planned	•	Following completion of the drilling
	further work (eg tests for lateral		program and receipt of all assay
	extensions or depth extensions or		results the prospect will be subject to
	large-scale step-out drilling).		detailed data compilation and review
	• Diagrams clearly highlighting the		potentially resulting in further drilling
	areas of possible extensions,		early in 2018.
	including the main geological
	interpretations and future drilling
	areas, provided this information is not
	_commercially sensitive. _

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