IRON BEAR RESOURCES LTD — Interim / Quarterly Report 2019

Oct 30, 2018

September 2018 Quarterly Report 31 October 2018

31 October 2018

Cape Lambert Resources Limited (ASX: CFE) is a mineral development company with exposure to cobalt, lithium, copper, iron ore, uranium, and lead-silver-zinc assets in Australia, Europe, Africa and South America.

QUARTERLY REPORT – 30 September 2018

Please find attached the Quarterly Activities Report and Appendix 5B for the period ended 30 September 2018.

Yours faithfully Cape Lambert Resources Limited

Australian Securities Exchange Code: CFE

Ordinary shares 1,011,734,914

Unlisted Options 15,336,363 ($0.07 exp 12 Mar 2020) 7,667,727 ($0.07 exp 19 Mar 2020) 5,250,000 ($0.04 exp 31 Mar 2020)

Board of Directors

Tony Sage Executive Chairman

Tony Sage

Executive Chairman

Tim Turner Non-executive Director

Stefan Müller Non-executive Director

Melissa Chapman Company Secretary

Cape Lambert Contact Investor Relations Phone: +61 8 9380 9555 Email: info@capelam.com.au

www.capelam.com.au

Cape Lambert Resources Limited September 2018 Quarterly Report

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ASX Announcement Quarterly Report Period Ended 30 Sepetmber 2018

CORPORATE

Strategy and Business Model

Cape Lambert Resources Limited ( ASX: CFE ) ( Cape Lambert or the Company ) is an Australian domiciled mineral development company. Cape Lambert has interests in several exploration and mining companies, providing exposure to iron ore, copper, gold, uranium, cobalt, lithium and lead-silver-zinc assets in Australia, Europe, Africa and South America (refer Figure 1).

Cape Lambert’s strategy is to acquire and invest in undervalued and/or distressed mineral assets and companies ( Projects ) and:

• improve the value of these Projects, through a hands on approach to management, exploration, evaluation and development; and

• retain long-term exposure to these Projects through a production royalty and/or equity interest.

Cape Lambert aims to deliver Shareholder value by adding value to these undeveloped Projects. If Projects are converted into cash, the Company intends to follow a policy of distributing surplus cash to Shareholders.

Figure 1: Group Structure September 2018

(ASX: CFE)

	(ASX: CFE)	(ASX: CFE)	(ASX: CFE)	(ASX: CFE)	(ASX: CFE)
Exploration Projects				Investments in Listed Entities
Marampa Iron Ore Project CFE - 100% Sierra Leone				Fe Limited (ASX: FEL) 39.33% interest Iron Ore, Gold, Nickel(Yilgarn, Australia)
Kukuna Iron Ore Project CFE Sierra Leone				International Goldfields Limited (ASX: IGS) 19.35% interest Gold(Australia/ Cote d'Ivoire/ Brazil)
Wee MacGregor Copper Project CFE - 100% Australia				Cauldron Energy Limited (ASX: CXU) 15.93% interest Uranium(Australia/ Argentina)
Kipushi Cobalt Project CFE - 35% DRC				European Lithium Limited (ASX: EUR) 12.00% interest Lithium(Austria)
Zambia Cobalt Project CFE - 70% JV DRC

Cape Lambert Resources Limited September 2018 Quarterly Report

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ASX Announcement Quarterly Report Period Ended 30 September 2018

September

Cash Balance

As at 30 September 2018, the Company had approximately A$841k. Prior to 30 June 2018, the Company controlled FE Limited ( FEL ) and as such consolidated its cash at bank it in accordance with accounting standards. The Company’s control over FEL has ceased and as such not accounts for its invetments in FEL using the equity method.

Placements

On 3 July 2018, the Company completed a placement of 1,000,000 fully paid ordinary shares at $0.03 per share to raise cash proceeds of $30,000 (before costs).

On 13 July 2018 the Company completed a placement of 10,600,000 fully paid ordinary shares at $0.03 per share to raise cash proceeds of $300,000 (before costs) and settle liabilities of the Company of $18,000.

On 23 July 2018 the Company completed a placement of 38,924,698 fully paid ordinary shares at $0.03 per share to raise cash proceeds of $1,104,741 (before costs) and settle liabilities of the Company of $63,000.

On 23 July 2018 the Company issued 23,500,000 fully paid ordinary shares to Gulf Energy International Limited upon the exercise of options to raise cash proceeds of $1,175,000.

Funds raised from the placement will be used towards funding its exploration expenditure activities at the Kipushi Cobalt-Copper Tailings Project in the Democratic Republic of Congo and for general working capital purposes.

The placement shares were issued under Cape Lambert’s existing placement capacity under ASX listing rule 7.1 and 7.1A and therefore shareholder approval was not required.

Investments

Kitwe Tailings Project – Zambia

In the June 2018 quarterly, the Company announced that it had executed anew share sale agreement with Zambian entity Australian Mining Company Zambia Limited ( Seller or AMCZL ), to conditionally acquire a 60% interest in exploration licence No 21853-HQ-SEL ( Licence or Kitwe Project) (Acquisition) . The Licence covers an historic cobalt-copper rich tailings dump located near Kitwe in Zambia. Completion of the Acquisition is subject to the payment of Milestone Payments (refer June 2018 Quarterly dated 30 September 2018).

The Kitwe Project is located approximately 3km from the outskirts of Kitwe, in the Copperbelt region of Zambia. Kitwe is the second largest city, in terms of size and population, in Zambia and is one of the most developed commercial and industrial areas in the nation, alongside Ndola and Lusaka. The Copperbelt is centered around the towns of Ndola, Kitwe, Chingola, Luanshya and Mufulira – a string of towns on Zambia's northern border with the Democratic Republic of Congo.

During the quarter the Company commenced a metallurgical testwork programme on four 25kg tailings samples at the laboratory of Alfred H Knight, which is located in Kitwe. The programme has been designed to test the leaching characteristics of the tailings.

Cape Lambert Resources Limited September 2018 Quarterly Report

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ASX Announcement Quarterly Report Period Ended 30 September 2018

During the quarter the Company engaged drilling contractor Wallis Drilling Pty Ltd and completed an air core drilling of the tailings dump, with 114 holes drilled for a total of 1082m. The samples are being readied for dispatch to a laboratory for assay.

Timis Mining Legal Action

As previously announced, the Company has commenced legal action against Gerald Metals, Timis Mining Corporation, Frank Timis and others (jointly the Defendants ) in the High Court of Sierra Leone seeking damages and injunctions against the Defendants (refer ASX announcement dated 15 May 2017, 19 May 2017 and 7 July 2017).

During the quarter, the Company entered into a damages-based agreement with a UK based legal firm to proceed further with the legal matter.

PROJECTS

Marampa (100% interest)

Marampa is an iron ore project at the development stage, and is located 90 km northeast of Freetown, Sierra Leone, West Africa ( Marampa or Marampa Project ) (refer Figure 2). Marampa comprises one granted mining licence (ML05/2014) comprising 79.40km[2] and one granted exploration licence EL46A/2011 – 159.78 km[2] held by Marampa Iron Ore (SL) Limited, which is indirectly, a wholly owned subsidiary of Cape Lambert.

During the quarter, the Company received a letter from the Sierra Leone Ministry of Mines ( MoM ) informing Marampa Iron Ore (SL) Limited ( Marampa SL ) of the cancellation of the Marampa mining license ML05/2014 due to non payment of fees. In September 2014, Marampa SL submitted to the MoM an application letter entitled “Force Majeure to all Cape Lambert Operations in Sierra Leone” which was acknowledged by the MoM. The Company understood that the agreement with the MoM was that force majeure events were aknowledged and authorised and as such no fees would accrue or be payable until a processing facility was operating and Marampa SL is producing iron ore from Marampa. The Company understands that the notice of cancellation of license letter has incorrectly been issued by the new Sierra Leone government who are not aware of the agreement. In order to protect it’s position, Marampa SL has engaged Sierra Leone based lawyers BMT Law Chambers who has commenced legal action in the High Court of Sierra Leone against the cancellation of the licence.

Dempsey Resources (100% interest)

Dempsey Resources holds the Kukuna Iron Ore Project located in Sierra Leone ( Kukuna or Kukuna Project ).

The Project is located 120 km northeast of Freetown in the northwest of Sierra Leone and consists of one exploration licence (EL22/2012) covering 68km[2] (refer Figure 2). The licence is located 70km due north of the Marampa Project and the Pepel Infrastructure and comprises rocks that correlate with the Marampa Group stratigraphy known to host specular hematite mineralisation.

The Kukuna Project remains under care and maintenance.

Cape Lambert Resources Limited September 2018 Quarterly Report

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ASX Announcement Quarterly Report Period Ended 30 September 2018

September

- Kipushi and Kasombo Copper Cobalt Projects (JV with Paragon Mining SARL)

The Kipushi Cobalt Copper Tailings Project consists of a tailings dam located on PE 12347 and the Kipushi Processing Plant located adjacent mining licence PE481 ( Kipushi Project ), and retains an interest in the Kasombo Copper-Cobalt Project through its shareholding in FEL ( Kasombo Project ), refer Figure 2. Both projects are located approximately 25km from Lubumbashi, the second largest city in the Democratic Republic of Congo ( DRC . The Company has a 50/50 joint venture agreement with Paragon Mining SARL ( Paragon ) to develop the projects (refer to ASX announcement dated 3 May 2017 for details of the joint venture arrangement). The joint venture company is Soludo Lambert Mining SAS ( Soludo Lambert ).

Kipushi Project

In August 2018, the Company reported that the Engineering Study completed by Minnovo Pty Ltd (Minnovo) was updated to provide for the production of a copper-rich MHP and a cobalt-rich MHP separately (refer ASX announcement dated 20 August 2018). The production of separate products is advantageous as the copper-rich MHP can be sold to copper focused companies whereas, the cobalt-rich MHP can be sold to cobalt focused companies, therefore, greatly expanding the potential buyer base.

During the quarter, Minnovo continued with the detailed design of the 1Mtpa leaching plant and in particular the issuance of specificatiions for tendering the long lead item equipments. Soludo Lambert issued tenders for thickeners, filter presses, horizontal belt filter, SO2 scrubber and agitators. Quotations were received and are being reviewed by Minnovo for compliance with the specifications and data sheets.

In addition, fabrication tenders were issued for tankage works (2 packages) and for the workshop/warehouse building. Quotations were received and are currently being assessed.

Soludo Lambert also issued a tender document for the concrete works at the leaching plant to four reputable companies operating in the DRC. Quotations were received and are currently being assessed.

Soludo Lambert also awarded the design of the leach residue storage facility ( LRSF ) to Golder Associates Africa. Golder visited the site to undertake geotechnical investigations at the proposed LRSF location. Design works on the LRSF has commenced.

In September 2018, Soludo Lambert engaged drilling contractor Solutions for Africa to undertake a drilling programme at the Kipushi TSF. At month end 43 holes for a total of 421m had been completed. The programme plans for 166 holes, however many holes are not accessible to the drill rig, therefore, sampling will be undertaken by other means where possible. A batch of samples has been dispatched to the laboratory of ALS in Lubumbashi for assay. The drill programme is expected to be completed mid-October 2018.

The Company is currently investigating funding opportunities including offtake negotiations and debt financing.

Kasombo Project

During the quarter the results of sampling from the trenching programme and other works undertaken at Kasombo 7 were reported by FEL (refer ASX announcement dated 23 August 2018). The following information has also been reported by FEL in their September 2018

Cape Lambert Resources Limited September 2018 Quarterly Report

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September

ASX Announcement Quarterly Report Period Ended 30 September 2018

quarterly report. Samples taken returned significant cobalt grades from two trenches and strongly anomalous grades in the remainder within the expected stratigraphic sequence particularly when all samples were taken from the heavily leached top few metres of the weathering profile (refer Table 1).

In June 2018, in addition to trenching, the FEL engaged the services of the Department of Geology from the University of Lubumbashi (University), to undertake a ground magnetics and a geochemical survey of the Kasombo area utilizing termite mound sampling. FEL reported that the ground magnetics field work consisted of 12 survey lines of approximately 1.2km each in length, and 400m apart oriented N-S, totalling a cumulative length of 20.2km.

FEL also reported a total of 137 termite mound samples were collected as part of the geochemical survey over the known fragnments and their surrounds The results of the trench mapping and sampling correlated well with the geochemical and magnetic work and have provided good targeting information to possibly extend the known mineralization with future drilling (refer FEL September 2018 quarterly report).

Trench summary assay

Trench_ID	From	To	Thick	Co_ppm	Comment
KSB_TR001	20.4	24.9	4.5	650
KSB_TR001	53.2	61.2	8.0	590
KSB_TR002	3.0	9.0	6.0	585
KSB_TR003					no significant Co assay
KSB_TR004	4.0	6.0	2.0	920
KSB_TR005	21.0	28.0	7.0	690
KSB_TR006	42.0	52.0	10.0	2050
KSB_TR007	16.0	28.0	12.0	2300

Mining International Pty Ltd (100% Interest)

Mining International Pty Ltd ( Mining International ), is a wholly owned subsidiary of Cape Lambert. The Company holds tenure to 4 mining leases (which were excluded from the sale of the Leichhardt Copper Project) at the Wee MacGregor Project located 40 km southeast of Mt Isa in Queensland (refer Figure 4).

The tenements are located within in the Eastern Fold Belt of the Mt Isa inlier. The tenements are located in the Mary Kathleen Zone/Wonga Subprovince. This area is prospective for a variety of deposit types, most notably structurally controlled epigenetic copper and gold deposits.

Cohiba Minerals Limited ( Cohiba ) has a Farm-in agreement with the Company for mining licences ML 2504, ML 2773 and ML 90098, while Firebird Minerals Pty Ltd ( Firebird ) has a Farm-in agreement for mining licence ML 2771.

On 30 August 2018, Cohiba announced that results from its first phase drilling programme at Wee Macgregor had returned encouraging results. Results reported included: Hole GC5: 8-10m 1.2% Cu 10-12m 1.38% Cu Hole WM03: 2-4m 2.15% Cu, 0.063% Co, 1.1ppm Au 4-6m 1.49% Cu, 0.066% Co, 1.3ppm Au

(refer Cohiba ASX announcement dated 30 Augist 2018 for further detail)

Cape Lambert Resources Limited September 2018 Quarterly Report

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September

Figure 2: Cape Lambert West African Iron Ore Interests

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Cape Lambert Resources Limited September 2018 Quarterly Report

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September

Figure 3: Location of the Kipushi Project and Kasombo Project

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Cape Lambert Resources Limited September 2018 Quarterly Report

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Figure 4: Wee MacGregor Project Location

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Cape Lambert Resources Limited September 2018 Quarterly Report

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Appendix 1: Tenement Status

The mining tenements held at the end of each quarter, acquired and disposed of during the quarter and their location:

Tenement reference	Project & Location	Acquired interest during the **quarter **	Disposed interest during the **quarter **	Interest at the end of **quarter **
Marampa Project - EL 46A/2011	Lunsar - Sierra Leone	-	-	100%⁵
Marampa Project – ML 05/2014	Lunsar - Sierra Leone	-	-	100%⁵
Kukuna Project - EL 22/2012	Kukuna – Sierra Leone	-	-	100%
ML 90098 ¹	Wee MacGregor - Queensland	-	-	100%
ML 2504 ¹	Wee MacGregor - Queensland	-	-	100%
ML 2771 ²	Wee MacGregor - Queensland	-	-	100%
ML 2773 ¹	Wee MacGregor - Queensland	-	-	100%
21853-HQ-SEL3	Zambia	-	-	-
PER 123474	Kipushi – DRC	-	-	35%

• ¹ Subject to the Cohiba (Cobalt X) Farm-in agreement, refer to ASX March 2017 Quarterly Report for details.

• ² Subject to the Firebird Farm-in agreement, refer to ASX March 2016 Quarterly Report for details.

• 3 Completion of this transaction is in progress, Refer to ASX announcements for extent of interest.

• 4 Refer to ASX announcements for extent of interest.

• ⁵ Refer to comments above under Marampa.

There were no mining tenements with beneficial interest earned/lost in farm-in/farm-out agreements at the end of the quarter.

Cape Lambert Resources Limited September 2018 Quarterly Report

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Name of entity

Cape Lambert Resources Limited

ABN

Quarter ended (“current quarter”)

71 095 047 920

30 September 2018

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) staff costs (e) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Research and development refunds 1.8 Other (legal fees recovery of asset) 1.8 Other (receipt of royalty) 1.9 Net cash from / (used in) operating activities	- (1,457) - - (62) (660) - 1 - (520) - - -	- (1,457) - - (62) (660) - 1 - (520) - - -
	(2,698)	(2,698)
2. Cash flows from investing activities 2.1 Payments to acquire: (a) property, plant and equipment (b) tenements (see item 10) (c) investments	(17) - (4)	(17) - (4)

• See chapter 19 for defined terms. 01/09/2016

Appendix 5B Page 1

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
(d) other non-current assets 2.2 Proceeds from the disposal of: (a) property, plant and equipment (b) tenements (see item 10) (c) investments (d) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other 2.6 Net cash from / (used in) investing activities	- - - - - - - (68)	- - - - - - - (68)
	(89)	(89)
3. Cash flows from financing activities 3.1 Proceeds from issues of shares 3.2 Proceeds from issue of convertible notes 3.3 Proceeds from exercise of share options 3.4 Transaction costs related to issues of shares, convertible notes or options 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (provide details if material) 3.10 Net cash from / (used in) financing activities	1,435 - 1,175 (13) - - - - -	1,435 - 1,175 (13) - - - - -
	2,597	2,597
4. Net increase / (decrease) in cash and cash equivalents for the period	(190)	(190)
4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above)	1,016 (2,698)	1,016 (2,698)

• See chapter 19 for defined terms. Appendix 5B Page 2

01/09/2016

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above) 4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	(89) 2,597 15	(89) 2,597 15
	841	841
5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	841 - - -	1,016¹ - - -
	841	1,016

• See chapter 19 for defined terms. 01/09/2016

Appendix 5B Page 3

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

7.	Payments to related entities of the entity and their	Current quarter
	associates	$A'000
7.1	Aggregate amount of payments to these parties included in	186
	item 1.2
7.2	Aggregate amount of cash flow from loans to these parties	-
	included in item 2.3
7.3	Include below any explanation necessary to understand the transactions included in
	items 7.1 and 7.2
Payments included in item 7.1 are inclusive of GST and relates to payments to director-related
parties	for office occupancy, reimbursement of travel costs, corporate hospitality costs and other
corporate costs.

8. Financing facilities available Add notes as necessary for an understanding of the position Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 8.1 Loan facilities - - 8.2 Credit standby arrangements - - 8.3 Other (please specify) - - 8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
	-	-
	-	-
	-	-

Not applicable

9. Estimated cash outflows for next quarter	$A’000
9.1 Exploration and evaluation 9.2 Development 9.3 Production 9.4 Staff costs 9.5 Administration and corporate costs 9.6 Other (sale of asset) 9.7 Total estimated cash outflows	(891) - - (63) (822) -
	(1,776)

• This is an estimate of the total cash outflows of the Company for the next quarter and does not take into account proceeds from any proposed placements or debt financing.

• See chapter 19 for defined terms. Appendix 5B Page 4

01/09/2016

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

10. Changes in tenements (items 2.1(b) and 2.2(b) above)	Tenement reference and location	Nature of interest	Interest at beginning of quarter	Interest at end of quarter
10.1 Interests in mining tenements and petroleum tenements lapsed, relinquished or reduced	-	-	-	-
10.2 Interests in mining tenements and petroleum tenements acquired or increased	-	-	-	-

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

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Sign here: ............................................................ Date: 31 October 2018 Company Secretary

Print name: Melissa Chapman

Notes

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

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. See chapter 19 for defined terms. 01/09/2016

Appendix 5B Page 5