IONIC RARE EARTHS LIMITED — Interim / Quarterly Report 2015

Oct 29, 2015

30 October 2015

ASX Announcement

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QUARTERLY REPORT FOR THE PERIOD ENDING 30 SEPTEMBER 2015

HIGHLIGHTS

ORO VERDE LIMITED (ASX code: OVL)

An emerging resource company focused on Nicaragua

KEY PROJECTS - Nicaragua Topacio Gold Project San Isidro Gold Project

BOARD OF DIRECTORS Executive

Trevor Woolfe - MD Brett Dickson - Finance Dir

Non-Executive

Wolf Martinick - Chairman Tony Rovira Brad Farrell

MANAGEMENT - NICARAGUA

David Turner - Country Mgr Jacques Levy – Admin Mgr

REGISTERED OFFICE

Level 1, 30 Richardson St, West Perth, WA 6005 AUSTRALIA +61 (0) 8 9481 2555

WEBSITE

www.oroverde.com.au

• New high grade gold targets identified at Topacio

• High grades from surface sampling outside the Topacio gold resource area:

• Topacio NE up to 52.4 g/t Au and 158 g/t Ag

• • Chicago vein up to 23.8 g/t Au and 41 g/t Ag • Isabella up to 21.3 g/t Au and 18 g/t Ag • Su Majestad up to 9.0 g/t Au and 14 g/t Ag

• Epithermal vein textures at Rebeca/Isabella and silicification/ brecciation at Buena Vista, combined with anomalous geochemistry, indicate the potential for a large scale, high level epithermal system on the Topacio concession.

• Environmental approval received for exploration to commence at Oro Verde’s 100%-owned San Isidro Gold Project

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Oro Verde Limited (ASX: OVL) (“Oro Verde” or “the Company”) is pleased to provide its quarterly report for the period ending 30 September 2015. The September quarter has been a successful period and with progress for the Company on its gold projects located in Nicaragua.

On the 340,000 ounce Topacio Gold Project, located in the southeast of Nicaragua (Figure 1), the Company has continued to expand the immense potential of this under-explored epithermal gold system. Spectacular gold (Au) and silver (Ag) grades, as high as 52.4 g/t Au and 158 g/t Ag have been reported[1] , enhancing the ‘bonanza’ gold grades of up to 92.9 g/t Au and silver grades up to 480 g/t Ag that the Company reported in the previous quarter[2] .

Additionally, Oro Verde received environmental approval during the quarter for its proposed work program at the 100%-owned San Isidro Gold Project, located in the northwest of Nicaragua (Figure 1). The Company has now commenced early stage exploration activities on this area which is located adjacent to the 2.3Moz La India Gold Project, owned by Condor Gold (UK).

1 Refer to ASX announcement dated 9 September 2015 “High Grade Gold Results Continue for Topacio” 2 Refer to ASX announcement dated 30 July 2015 “June Quarterly Activities and Cashflow Report”

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San Isidro
Topacio
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Figure 1 Oro Verde’s Nicaraguan Gold Projects (yellow) and other major mines/deposits

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Buena Vista
Topacio NE & Su Majestad
Northwest veins
Isabella-Rebeca
Topacio resource area
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Figure 2 Topacio – Mining concession and new target areas

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TOPACIO GOLD PROJECT

This quarter, the Company was successful in delineating new high grade gold and silver target areas to enable expansion of the previously identified gold resource area. Target generation mapping and sampling focused on a number of under-explored areas of the large 93km[2] concession (tenement), including (Figure 2):

• Northwest veins - Celedonio, Chicago and Gallina veins

• • Topacio NE - Topacio NE, Su Majestad, Canada and La Pispireta veins • Isabella/Rebeca are - Isabella, Rebeca and Rebeca SW split veins • Buena Vista area - Buena Vista prospect

Northwest Veins

The veins to the northwest of the Topacio gold resource area (Figure 2) continue to return high gold and silver grades, demonstrating the area’s potential for significant gold mineralisation. The zone consists of a number of veins striking in NE and NW directions. While the western end of the Mico vein strikes northeasterly, the Chicago vein cuts it in a west-northwesterly orientation and appears to also disrupt other NE trending veins at Celedonio and Gallina.

An earlier sample from an ore pile on the Chicago vein[3] returned a promising result of almost 8 g/t Au. The Company’s recent sampling from artisanal workings and also channel sampling across the Chicago vein[1] has reinforced this prospectivity with high grade gold results (Table 1), including:

• Sample 48600 21.0 g/t Au and 12.1 g/t Ag

• Sample 48603 23.8 g/t Au and 41.1 g/t Ag

The complex interplay between these cross cutting veins is still being identified and evaluated by our mapping and sampling activities, however the presence of multiple high grade gold results strongly suggests the existence of high grade shoots in dilational settings related to the intersections of these cross cutting veins.

Topacio NE Zone

The Topacio vein has a northeasterly strike length of over three kilometres (Figure 2). However the main Topacio vein and other veins, such as Dispute and Dos Amigos, are offset by smaller northwesterly trending quartz veins and structures in the Topacio NE area. Sampling of the Topacio NE vein itself resulted in very high grade gold and silver analyses[1] , up to 52.4 g/t Au and 158 g/t Ag:

• Sample 48614 19.0 g/t Au and 25.4 g/t Ag

• Sample 48615 52.4 g/t Au and 158 g/t Ag

The Su Majestad vein is one of the veins cross-cutting the Topacio vein. During the quarter, all nine rock chip samples from Su Majestad were found to be anomalous in gold[1,4] with two of the samples recording high grade gold results (Table 1) and silver reaching as high as 52.1 g/t Ag:

• Sample 48627 6.33 g/t Au and 11.2 g/t Ag

• Sample 48631 9.00 g/t Au and 14.1 g/t Ag

The presence of high grade gold in this zone suggests the existence of high grade shoots in dilational settings related to the intersections of these cross cutting veins, similar to that described above for the Northwest Vein area. Other northwesterly trending, cross-cutting veins in this area that were sampled include the Canada and La Pispireta veins. All three samples from these veins were anomalous in gold, with the two samples from the Canada vein recording 3.38 and 2.15 g/t Au . Gold was also encountered from sampling of the Topacio and Dos Amigos veins in this Topacio NE Zone[4] .

Isabella-Rebeca Vein

Oro Verde believes that the 93km[2] Topacio Gold Project has the potential to contain a multi-million ounce low sulphidation epithermal gold system. This belief is based on the existence of epithermal vein textures

3 Refer to ASX announcement dated 15 June 2015 “High Gold Grades from West Mico Vein at Topacio”

4 Refer to ASX announcement dated 20 October 2015 “Isabella Vein Returns up to 21.3g/t Gold”

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(for example at the Isabella/Rebeca vein) and geochemistry across the broader concession area that indicates the possibility for a deeper buried system, particularly to the east of the existing Topacio gold resource area.

The Isabella-Rebeca line of veins has a northwesterly strike length of at least 1.3 km and may be discontinuously linked to the Su Majestad vein (Figure 2). Earlier reconnaissance sampling of the outcropping Isabella vein by the Company[5] had shown that the epithermal vein with significant colloform banding was mineralised, however results had typically been lower grade – in the range 0.2 to 2.5g/t gold. But the latest high grade result (Sample number 48636)(Figure 4) - from a brecciated quartz vein - indicates greater prospectivity for the Isabella vein:

• Sample 48636 21.3 g/t Au and 18.0 g/t Ag

Further to the southeast, on the Rebeca section of the vein, anomalous gold values up to 1.17 g/t Au were recorded from the latest sampling, along with coincident elevated arsenic and antimony levels.

Buena Vista

Earlier sampling, with gold grades up to 3.35 g/t Au[3] from the stockwork hosted gold at Buena Vista , provides significant encouragement for a new style of mineralisation, 6 km away from the multiple vein, low sulphidation, epithermal type Topacio gold resource (Figures 2 and 3).

Field activities during the quarter were focused on local community relations and liaison with local landowners. The three samples collected were of wallrock lithologies and as expected were unmineralised for gold, however showed elevated levels of other accessory minerals such as Ag, barium, copper, zinc, manganese, iron, sulphur and strontium.

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Topacio NE & Su Majestad Buena Vista
48614 19.0 g/t Au and 25 g/t Ag
Northwest Veins 48615 52.4 g/t Au and 158 g/t Ag
48600 21.0 g/t Au and 12 g/t Ag 48627 6.33 g/t Au and 11 g/t Ag
48603 23.8 g/t Au and 41 g/t Ag 48631 9.00 g/t Au and 14 g/t Ag
Isabella-Rebeca
48636 21.3 g/t Au and 18 g/t Ag
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Figure 3 Topacio Gold Project – Latest Oro Verde sampling results

5 Refer to ASX announcement dated 3 February 2015 “High Gold Grade Potential Confirmed at Topacio Project”

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4

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Figure 4 Topacio NE, Su Majestad and Isabella-Rebeca – Latest Oro Verde sampling results (in isolation)

Table 1 Topacio - Summary of June quarter Oro Verde sampling: gold (Au>3g/t) and silver grades

SAMPLE NUMBER	NORTHING	EASTING	VEIN	SAMPLE TYPE	Au (g/t)	Ag (g/t)
48600	1,339,119	778,952	Chicago	1.2m channel – quartz vein	21.00	12.1
48602	1,339,127	778,944	Chicago	Ore pile – artisanal workings	5.40	2.5
48603	1,339,130	778,944	Chicago	Ore pile – artisanal workings	23.80	41.1
48608	1,338,752	780,996	Su Majestad	0.9m channel – quartz vein	3.70	5.6
48609	1,338,754	780,989	Su Majestad	1.4m channel – quartz vein	2.87	8.7
48610	1,338,761	781,006	Su Majestad	Ore pile – artisanal workings	5.12	24.8
48614	1,339,108	781,142	Topacio NE	1.1m channel – quartz vein	19.00	25.4
48615	1,339,116	781,161	Topacio NE	Ore pile – artisanal workings	52.40	158.0
48621	1,338,445	780,370	Canada (?)	Subcrop	3.38	13.6
48627	1,338,746	781,037	Su Majestad	1.0m quartz vein	6.33	11.2
48631	1,338,680	781,285	Su Majestad	1.0m quartz vein - subcrop	9.00	14.1
48632	1,338,711	781,234	Su Majestad	1.0m quartz vein - subcrop	4.46	5.2
48636	1,338,371	781,873	Isabella	1.0m quartz vein - subcrop	21.30	18.0

Co-ordinate system UTM Zone 16 and datum NAD27 Central

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SAN ISIDRO GOLD PROJECT

The San Isidro Gold Project, located in the northwest of Nicaragua (Figure 1), consists of a 25km[2] (or 2,520.49 ha) mining concession and is held 100% by Minera San Cristóbal S.A. (MSC), a Nicaraguan subsidiary of Oro Verde.

San Isidro is located adjacent to the La India Gold Project which contains a 2.3 million ounce gold resource and is held by UK company Condor Gold plc, which released a positive PFS study in December 2014 with the potential for both open pit and underground mine development. Oro Verde’s San Isidro Gold Project has the potential to contain La India-style vein-hosted epithermal gold mineralisation.

Work Program

Following the environmental approval for Oro Verde’s San Isidro work program, by the Nicaraguan Ministry for the Environment and Natural Resources (MARENA), the Company has commenced its initial exploration. The first phase involves a modest budget reconnaissance style exploration program incorporating geological mapping, stream sediment sampling and rock chip sampling to complement earlier photographic interpretation. The immediate objective is to delineate areas of gold mineralisation for target drilling.

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5 km
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Figure 5 La India Gold District veins and the San Isidro Gold Project

CORPORATE

Oro Verde continues to search for new high quality project opportunities in Nicaragua, particularly taking advantage of our strong in country presence and team. At 30 September 2015, the Company had 458,948,408 shares on issue and $382,000 cash on hand.

Schedule of Mining Tenements Owned

Common name	Location	Nature of	Interest at beginning	Interest at end of
		Interest	of quarter	quarter
HEMCO-SID (San Isidro) – 1351	Nicaragua	Owned	100%	100%
Presillitas (Topacio) - 39	Nicaragua	Option	0%	0%

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BACKGROUND

On 25 February 2015, Oro Verde announced the positive due diligence and acceptance of an Option to Purchase Agreement over the high grade Topacio Gold Project, located in southeastern Nicaragua (Figure 1). The project boasts a historical NI 43-101 (Canadian standard, similar to JORC) compliant Inferred Resource of:

2,716,176 tonnes at 3.9 g/t gold, containing 340,345 ounces of gold, at a 1.5 g/t gold cut-off[6] .

National Instrument 43-101 (“NI 43-101”) is a national instrument for the Standards of Disclosure for Mineral Projects within Canada and as such this estimate is a foreign estimate and is not reported in accordance with the JORC Code. A competent person has not done sufficient work to classify the foreign estimate as mineral resources in accordance with the JORC code and it is uncertain that following evaluation and/or further exploration work that the foreign estimate will be able to be reported as mineral resources in accordance with the JORC code.

For enquiries contact:

For enuiries contact:
q
Mr Trevor Woolfe	Mr Brett Dickson
Managing Director	Company Secretary
+61 411 127 837	+61 8 9481 2555

About Oro Verde Limited: Oro Verde Ltd is a mineral exploration company focused on identifying and developing significant gold projects in Central America, particularly Nicaragua. Oro Verde holds an Option to Purchase Agreement on the Topacio Gold Project in Nicaragua that currently contains a NI43-101 compliant Inferred Mineral Resource of 340,000 ounces of gold. Oro Verde also holds 100% of the early stage San Isidro Gold Project, also in Nicaragua, located adjacent to the 2.3 million ounce La India gold project.

COMPETENT PERSON STATEMENTS

The information in this document that relates to earlier Exploration Results is extracted from the following reports: “High Grade Gold Potential Confirmed at Topacio Project” created on 3 February 2015; “High Gold Grades from West Mico Vein at Topacio” created on 15 June 2015; “June Quarterly Activities and Cashflow Report” created on 30 July 2015; “High Grade Gold Results Continue for Topacio” created on 9 September 2015 and “Isabella Vein Returns 21.3 g/t Gold” created on 20 October 2015, all completed under Mr Trevor Woolfe as Competent Person and available to view on www.asx.com. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcements.

The information in this document that relates to Historical Mineral Resources is extracted from the report entitled “Acquisition of High Grade Gold Project” created on 11 November 2014 and available to view on www.asx.com. The Company confirms that it is not in possession of any new information or data that materially impacts on the reliability of the estimates in the original market announcement and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.

6 Refer to ASX announcement dated 11 November 2014 “Acquisition of High Grade Gold Project”

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Appendix 5B Mining Exploration Entity Quarterly Report

Appendix 5B

Mining Exploration Entity Quarterly Report

Name of entity

	Oro Verde Limited
	ABN 84 083 646 477 Consolidated statement of cash flows
			30 September 2015
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration and evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other NetOperating Cash Flows		Current quarter $A’000		Year to date (3 months) $A’000
		- (97) - - (60) - 1 - - -		- (97) - - (60) - 1 - - -
		(156)		(156)
Cash flows related to investing activities 1.8 Payment for purchases of:(a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)		- - - - - - - - -		- - - - - - - - -
		-		-
		(156)		(156)

Appendix 5B Page 1

Appendix 5B Mining Exploration Entity Quarterly Report

1.13 Total operating and investing cash flows (brought forward)	(156)	(156)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other Net financing cash flows	- - - - -	- - - - - -
	-	-
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end ofquarter	(156) 535 3	(156) 535 3
	382	382

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	Curent quarter $A'000
		20
		-
1.25	Explanation necessaryfor an understandingof the transactions
	Item 1.23 includes aggregate amounts paid to directors including salary, consulting fees, directors’ fees and superannuation.

Non-cash financing and investing activities

2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

N/A

Appendix 5B Page 2

Appendix 5B Mining Exploration Entity Quarterly Report

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount used $A’000
	NIL	NIL
	NIL	NIL

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	100
	-
	-
	100
Total	200

Reconciliation of cash

Total Reconciliation of cash	Total Reconciliation of cash		200
Reconciliation of cash at the end of the quarter (as		Current period	Previous period
shown in the consolidated statement of cash flows) to		$A’000	$A’000
the related items in the accounts is as follows.
5.1	Cash on hand and at bank	349	502
5.2	Deposits at call	33	33
5.3	Bank overdraft
		-	-
5.4	Other (provide details)
		-	-
	Total: cash at end of quarter(item 1.22)	382	535

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note(2))	Interest at beginning ofquarter	Interest at end of quarter
	-	-	-	-
	-	-	-	-

Appendix 5B Page 3

Appendix 5B Mining Exploration Entity Quarterly Report

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1 Preference+securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs,redemptions
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	458,948,408	458,948,408
	10,000,000	10,000,000	$0.008	$0.008
7.5 +Convertible debt securities(description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	2,500,000 1,000,000 73,000,000 73,000,000	- - - -	Exercise price $0.20 $0.04 $0.01 $0.05	Expiry date 10 January 2016 31 March 2016 30 September 2017 30 September 2019
7.11 Debentures (totals only)
7.12 Unsecured notes (totals only)

Appendix 5B Page 4

Appendix 5B Mining Exploration Entity Quarterly Report

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

• 2 This statement does give a true and fair view f the matters disclosed.

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Sign here: ............................................................ Date: 30 October 2015 Company Secretary

Print name: Brett Dickson

Notes

• 1 The report provides a basis for informing the market how the entity’s activities have been financed for the past period and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

• 2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

• 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

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Appendix 5B Page 5