IMPACT MINERALS LIMITED — Capital/Financing Update 2017

May 2, 2017

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ASX ANNOUNCEMENT

Date: 3 May 2017 Number: 508/030517

EXPLORATION UPDATE: BROKEN HILL PROJECT, NSW

VTEM Survey identifies eight areas with nickel-copper-PGM potential along the Rockwell-Little Broken Hill Trend.

One kilometre long near surface geochemical anomaly identified along western margin.

Eight areas for follow up exploration for high grade deposits of nickel-copper-platinum group metals (PGM)-cobalt have been identified in a helicopter-borne VTEM survey over the Rockwell to Little Broken Hill Trend within Impact Minerals Limited’s (ASX:IPT) 100% owned Broken Hill Project in New South Wales, Figure 1).

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Moorkai Trend
Little Darling Creek
Rockwell-
Little Broken Hill
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Figure 1. Image of magnetic data showing Impact’s tenements at Broken Hill and key prospects.

26 Richardson Street West Perth Western Australia 6005 Tel +61 (8) 6454 6666 Facsimile +61 (8) 6454 6667 Email info@impactminerals.com.au www.impactminerals.com.au

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The eight areas are spread along the Trend and are within or at the margins of an maficultramafic complex interpreted from regional magnetic and gravity data to be about 8 kilometres long and up to 750 metres wide (Figure 2).

The areas contain numerous clusters of conductors of varying strength that are consistent with the expected response for the style of very high grade nickel-copper-PGM sulphide mineralisation being explored for and as have been discovered by Impact at the Red Hill and Platinum Springs Prospects to the north (Figures 1 and 2). At Red Hill exceptional grades have been returned from drilling including a stand out intercept of 1.2 metres at 283 g/t (9.1 ounces) platinum equivalent comprising 10.4 g/t platinum, 10.9 g/t gold, 254 g/t (9.5 ounces) palladium, 7.4% nickel, 1.8% copper, 19 g/t silver and 0.5% cobalt in vein hosted sulphide (see announcements dated 3rd February 2016 and 23rd October 2015).

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Red Hil-Dora East
1 km long surface anomaly
Up to 0.1% Ni, 0.1% Cu 0.5 g/t PGM
ROCKWELL
Sally Malay at
same scale
Areas identified by
VTEM
RAB anomaly
1m at 0.6% Ni, 0.2% Cu, 0.03% Co, 40 ppb PGM
LITTLE BROKEN HILL
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Sally Malay
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Geology of the Sally Malay area at same scale

Figure 2. Image of magnetic data over the Rockwell-Little Broken Hill Trend showing areas for follow up of VTEM (pink), the interpreted outline of the mafic-ultramafic rocks in black and key exploration results.

Also shown at the same scale is the size of the surface expression of the Sally Malay orebody in northern Western Australia also hosted in a similar sized mafic-ultramafic complex (20 Mt at 1.7% Ni, 0.7% Cu and 0.1% Co). The geology and geometry of the

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The Rockwell-Little Broken Hill area lies south of a major shear zone that separates it from the Red Hill Prospect and has been very poorly explored due to extensive shallow alluvial cover (Figure 2). Limited shallow RAB drilling to depths of less than 20 metres has identified near surface anomalous nickel-copper-platinum-palladium-gold in several places.

At Rockwell a coherent near-surface geochemical anomaly one kilometre long and 150 metres wide has been defined in shallow 2 metre deep drill holes along the north western margin of the complex with results of up to 0.1% nickel, 0.1% copper and 0.5 g/t PGM over a one metre thick intercept (Figure 2).

In the Little Broken Hill area only two widely spaced shallow RAB holes returned a maximum intercept of 7 metres at 0.3% nickel, 0.1% copper, 0.02% cobalt and 0.04 g/t Pt+Pd+Au from 12 metres depth.

There has been no drilling at depth along the entire trend.

The geometry and nature of the mafic-ultramafic host rocks along the Rockwell-Little Broken Hill trend is similar to that of the Sally Malay-Savannah deposit in northern Western Australia (approx. 20 Mt at 1.7% nickel, 0.7% copper and 0.1% cobalt) and Figure 1 also shows the geology of the area for comparison. The size of the surface expression of Sally Malay is also shown for comparison at the same scale.

It is evident that considerable scope exists to discover a significant nickel-copper-PGM-cobalt deposit in this area.

A VTEM survey was also completed over the Little Darling Creek Prospect and interpretation of this data is still in progress. Two areas have been identified for further work. A third area to the north, the Moorkai Trend, was not flown because of landowner concerns with stock animals and will be flown later in the year.

NEXT STEPS

Further interpretation and modelling of the VTEM data is in progress and follow up ground work will commence once completed. This work will include field checking, surface geochemical sampling and ground geophysical surveys where required to identify targets for drilling. Any targets identified will be drill tested together with follow up drilling at Red Hill.

The VTEM survey along the Moorkai Trend will be completed later in the year.

Dr Michael G Jones

Managing Director

The review of exploration activities and results contained in this report is based on information compiled by Dr Mike Jones, a Member of the Australian Institute of Geoscientists. He is a director of the company and works for Impact Minerals Limited. He has sufficient experience which is relevant to the style of mineralisation and types of deposits 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 (the JORC Code). Mike Jones has consented to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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APPENDIX 1 - SECTION 1 SAMPLING TECHNIQUES AND DATA

Criteria	JORC Code explanation Commentary
Sampling techniques	Nature and quality of sampling (e.g. cut 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). These examples should not be taken as limiting the broad meaning of sampling. Rock Chip Samples Random rock samples were taken at surface which represented favourable geology and alteration to known mineralisation in the region. Samples are variably weathered. Soil Samples Soil samples were taken at 50 m intervals from a hole 15-20 deep and sieved to -2mm to collect about 250 g of material. Diamond Drilling Diamond drilling was used to produce drill core either with a diameter of 63.5 mm (HQ) or 47.6 mm (NQ). A handheld XRF instrument was used to analyse the drill core at 50 cm intervals.
	Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used Rock Chip Samples Representative rock chip samples at each sample site weigh between 0.8 and 1.2 kg. Soil samples are taken at a consistent depth below surface and sieved. Soil Samples and Drill Samples Sample representivity was ensured by a combination of Company Procedures regarding quality control (QC) and quality assurance / testing (QA). Examples of QC include (but are not limited to), daily workplace and equipment inspections, as well as drilling and sampling procedures. Examples of QA include (but are not limited to) collection of “field duplicates”, the use of certified standards and blank samples approximately every 50 samples.
	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 (e.g. ‘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 explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information Rock Chip and Diamond Drill Samples Rock samples and split diamond core were sent to Intertek Adelaide where they were crushed, dried and pulverised (total prep) to produce a 25-30 g sub-sample for analysis by four acid digest with an ICP/AES finish for ore grade base metal samples and either lead collection or nickel sulphide fire assay with AAS or MS finish for gold and the PGMs. Weathered samples contained gossanous sulphide material. Soil samples were sent to SGS Perth for analysis by the MMI digest. The XRF data is qualitative only. A comparison between the XRF results and wet chemical assay data will be completed on receipt of final results.
Drilling techniques	Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc). Diamond Drilling comprises NQ (47.6 mm diameter) and HQ (63.5 mm diameter) sized core. Impact diamond core is triple tube and is oriented. Historical diamond core was not oriented.
Drill sample recovery	Method of recording and assessing core and chip sample recoveries and results assessed Diamond core recoveries for all holes are logged and recorded. Recoveries are estimated to be approximately >97% for the Red Hill Prospect. No significant core loss or sample recovery problems are observed in the drill core.

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Criteria	JORC Code explanation Commentary
	Measures taken to maximise sample recovery and ensure representative nature of the samples Diamond core is reconstructed into continuous runs on an angle iron cradle for orientation marking. Depths are checked against the depth given on the core blocks and rod counts are routinely carried out by the driller.
	Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material. No sample bias has been established.
Logging	Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies. Geological logging of samples followed company and industry common practice. Qualitative logging of samples included (but not limited to); lithology, mineralogy, alteration, veining and weathering. Diamond core logging included additional fields such as structure and geotechnical parameters. Magnetic Susceptibility measurements were taken for each 0.5 m diamond core interval. For diamond core, information on structure type, dip, dip direction, texture, shape and fill material has been recorded in the logs. RQD data has been recorded on selected diamond holes. Handheld XRF analysis was completed at 50 cm intervals on diamond core.
	Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography. All logging is quantitative, based on visual field estimates. Systematic photography of the diamond core in the wet and dry form was completed.
	The total length and percentage of the relevant intersections logged All diamond drill holes were logged in full. Detailed diamond core logging, with digital capture was conducted for 100% of the core by Impact’s on- site geologist.
Sub-sampling techniques and sample preparation	If core, whether cut or sawn and whether quarter, half or all core taken. All core samples were sampled by half core. Selected intervals of quarter core will be selected for check assays if required.
	If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. No RC drilling results are reported.
	For all sample types, the nature, quality and appropriateness of the sample preparation technique. Company procedures were followed to ensure sub-sampling adequacy and consistency. These included (but were not limited to) daily work place inspections of sampling equipment and practices, as well as sub-sample duplicates (“field duplicates”).
	Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples. Laboratory QC procedures for rock sample and diamond drill core assays involve the use of internal certified reference material as assay standards, along with blanks, duplicates and replicates.
	Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second- half sampling. Rock and Soil Samples Field duplicates were taken at selected sample sites.

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Criteria	JORC Code explanation Commentary
	Whether sample sizes are appropriate to the grain size of the material being sampled. Diamond Core Samples Quarter core duplicate samples are taken randomly every 50 samples. Sample sizes at Red Hill are considered adequate due to mineralisation style.
Quality of assay data and laboratory tests	The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. An industry standard fire assay technique for samples using lead collection with an Atomic Absorption Spectrometry (AAS) finish was used for gold and aqua regia digest for base metals and silver.
	For geophysical tools, spectrometers, 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. No geophysical tools were used to determine material element concentrations. A handheld XRF was used for qualitative analysis only.
	Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established. Rock Chip Samples For the rock chips, quality control procedures for assays were followed via internal laboratory protocols. Accuracy and precision are within acceptable limits. Diamond Drill Samples Reference standards and blanks are routinely inserted into every batch of samples at a rate of 1 in every 50 samples.
Verification of sampling and assaying	The verification of significant intersections by either independent or alternative company personnel. The results have not been verified by independent or alternative companies. This is not required at this stage of exploration.
	The use of twinned holes. No drilling results are reported.
	Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols. Primary assay data for rock chips has been entered into standard Excel templates for plotting in Mapinfo. All historical drill data has been entered digitally by previous explorers and verified internally by Impact.
	Discuss any adjustment to assay data. There are no adjustments to the assay data.
Location of data points	Accuracy and quality of surveys used to locate drillholes (collar and down- hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation. Sample locations and drill holes were located by hand held GPS.
	Specification of the grid system used. The grid system for Broken Hill is MGA_GDA94, Zone 54.
	Quality and adequacy of topographic control. Standard government topographic maps have been used for topographic validation. For the diamond holes, down-hole single shot surveys were conducted by the drilling contractor. Surveys were conducted at 15 m, 30 m and then approximately every 30 m down-hole.
Data spacing and distribution	Data spacing for reporting of Exploration Results. Sample spacing for the soil survey was on a 50 m by 50 m grid. Reconnaissance drill spacing is approximately 200 m.

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Criteria	JORC Code explanation Commentary
	Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. Estimations of grade and tonnes have not yet been made.
	Whether sample compositing has been applied. Sample compositing has not been applied.
Orientation of data in relation to geological structure	Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type. Not relevant to soil and rock chip results. The orientation of mineralisation in RHD001 yet to be determined.
	If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material. Not relevant to soil and rock chip results or early stage exploration drill results.
Sample security	The measures taken to ensure sample security. Chain of custody is managed by Impact Minerals Ltd. Samples for Broken Hill are delivered by Impact Minerals Ltd by courier who transports them to the laboratory for prep and assay. Whilst in storage, they are kept in a locked yard. Tracking sheets have been set up to track the progress of batches of samples.
Audits or reviews	The results of any audits or reviews of sampling techniques and data. At this stage of exploration a review of the sampling techniques and data by an external party is not warranted.

SECTION 2 REPORTING OF EXPLORATION RESULTS

Criteria	JORC Code explanation Commentary
Mineral tenement and land tenure status	Type, reference name/number, 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. The Broken Hill Project currently comprises 1 exploration licences covering 100 km2. The tenement is held 100% by Golden Cross Resources Ltd. Impact Minerals Limited is earning 80% of the nickel-copper- PGE rights in the licence from Golden Cross. No aboriginal sites or places have been declared or recorded over the licence area. There are no national parks over the license area.
	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. The tenement is in good standing with no known impediments.
Exploration done by other parties	Acknowledgment and appraisal of exploration by other parties. There has been no significant previous work at this prospect.
Geology	Deposit type, geological setting and style of mineralisation. Nickel-copper-PGE sulphide mineralisation associated with an ultramafic intrusion.

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Criteria	JORC Code explanation Commentary
Drill hole Information	A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: • easting and northing of the drill hole collar • elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar • dip and azimuth of the hole • down hole length and interception depth • hole length. See Table in text.
Data aggregation methods	In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high grades) and cut-off grades are usually Material and should be stated. All reported assays have been length weighted. No top cuts have been applied. A cut-off of approximately 0.1% Cu, 0.4% Cu and 1.0% Cu has been applied for reporting of exploration results.
	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. High grade massive sulphide intervals internal to broader zones of disseminated sulphide mineralisation are reported as included intervals.
	The assumptions used for any reporting of metal equivalent values should be clearly stated. No metal equivalents have been reported.
Relationship between mineralisation widths and intercept lengths	These relationships are particularly important in the reporting of Exploration Results. If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported. If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (e.g. ‘down hole length, true width not known’). The orientation of mineralisation in RHD001 is yet to be determined.
Diagrams	Appropriate maps and sections (with 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. Refer to Figures in body of text.
Balanced reporting	Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results. All results reported are representative

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Criteria	JORC Code explanation	Commentary
Other substantive exploration	Other exploration data, if meaningful and material, should be reported
data	including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater,	Assessment of other substantive exploration data is not yet complete however considered immaterial at this stage.
	geotechnical and rock characteristics; potential deleterious or
	contaminating substances.
Further work	The nature and scale of planned further work (e.g. tests for lateral
	extensions or depth extensions or large-scale step-out drilling). Diagrams clearly highlighting the areas of possible extensions, including	Follow up work programmes will be subject to interpretation of results which is ongoing.
	the main geological interpretations and future drilling areas, provided this
	information is not commercially sensitive