LINDIAN RESOURCES LIMITED — Capital/Financing Update 2017

Aug 2, 2017

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75% Farm In to Unique Tanzanian Bauxite Project

HIGHLIGHTS

• Binding heads of agreement to acquire a 75% farm in interest in the Tanzanian Lushoto bauxite project.

• The project is comprised of 3 prospecting licenses in North Eastern Tanzania that extends over an area of 53.6 km2.

• Excellent infrastructure already in place for any proposed DSO operations. Project located 7km from the township of Lushoto and 154 kilometres from the deep water port of Tanga. High quality sealed roads from Lushoto to Tanga port and rail access.

• The project was previously a historical bauxite mine supplying the local cement industry with old data confirming high grade and low silica levels.

• A recent site visit by company geologists further confirmed the extensive areas of bauxite mineralisation surrounding the old pit.

• 22 grab samples were collected at the site visit. Grades of up to 58% Al203 were obtained with an average grade of 46% Al203 and very low silica content with an average grade of 1.6% SiO2 (full details below)

• The aluminium industry is no longer as integrated as it used to be and the last 10 years has seen the growth of significant opportunities to export high grade direct shipping ore as pricing power is shifting upstream to alumina and bauxite producers.

• Lindian aims to define a JORC resource capable of sustaining an operation which produces direct shipping ore FOB Tanga Port.

• Lindian’s in country geological team will operate both the existing Uyowa gold project and the proposed bauxite farm in.

Lindian Resources Limited (“ Lindian ” or the “ Company ”) is pleased to announce that it has entered into a binding Heads of Agreement with Batan Australia Pty Ltd (“ Batan ”) to farm in and earn a 75% interest in the Lushoto Bauxite Project located in North Eastern Tanzania.

Under the Agreement, Lindian will, subject to due diligence and other conditions as set out below, acquire an initial 51% interest (AUD$400,000 farm in spend) with an option to move to 75% (AUD$1.4m farm in spend through to definitive feasibility). In line with the recent changes to Tanzania’s mining regulations, the vendors’ 25% interest also includes the ability to utilise 16% as the government interest currently mandated upon the project reaching a production stage.

Corporate Director Eddie King commented : “ the Board of Lindian is excited about the prospect of commencing the Lushoto Bauxite farm in and believes it will greatly enhance its existing activities in Tanzania. Looking at the recent upward trends in the high grade bauxite export trade and the excellent infrastructure already in place in (and between) Lushoto and Tanga, we believe the project offers great potential as a direct shipping ore operation once various geological boxes are ticked over the coming few quarters in line with previous historical work completed on the project. ”

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Lushoto Bauxite Project

The Lushoto Bauxite deposit was formed by deep weathering of metamorphic rocks of the Mozambique Belt that are exposed in Eastern Tanzania. The mineralisation is situated on plateaus within the Usambara Mountains that have been preserved from a time when mineralisation was more extensive in the area. Limited exploration has been conducted in the region to date however, in addition to the known deposit, bauxite has been noted in other plateaus in the area these occurrences are currently being investigated for the potential to host additional mineralisation.

Assay results to date show low levels of deleterious elements including iron, silica, titanium. Test work for reactive silica and available alumina is currently being undertaken as part of the due diligence process.

The presence of the Lushoto bauxite deposits were the subject of a University of Dar es Salaam report in 2003 which confirmed bauxite mineralisation of between 40-60% Al2O3 based on historical drilling data and surface geological mapping.

The results of the recent grab sampling program undertaken were in line with the conclusions of the 2003 report and greatly assist Lindian in obtaining a maiden JORC resource targeted for Q4 2017.

Further results of the sampling program are currently being undertaken in order to identify available alumina and reactive silica properties in order to get an initial view on the premium quality of a potential product that could be sold as direct shipping ore with negligible processing.

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Figure 1 Lushoto Project Location in North Eastern Tanzania

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Stage 1 Farm in Activities

Following the initial sampling program completed by the Company, the initial field activities proposed for the Lushoto project include

• Data acquisition, digitization and deskwork interpretation;

• Geological mapping aiming at establishing the extend of mineralization;

• Trenching excavation and pitting to test mineralization widths; and

• Drilling 1,200m for establishing initial JORC resources

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Figure 1 Bauxite exposure in the historic pit

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Figure 2 High quality sealed road between Lushoto and Tanga

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Figure 4 Geology map of the project area

The Bauxite Industry

• The aluminium industry is no longer as integrated as it used to be - pricing power is shifting upstream to alumina and bauxite producers;

• Aluminium demand still however drives alumina and bauxite growth - medium to long term demand is still forecast to be strong

• Demand continues to grow in key sectors including transportation, construction, power, packaging and consumer products

• Since 2002, China has developed over 50Mt of alumina refining capacity. Chinese alumina production was based on two approaches: 1 - Development of merchant refining capacity in Shangdong based on imported Indonesian bauxite and 2 - Processing of domestic ore. New refining capacity has led to record increase in bauxite demand and import. Declining quality of domestic bauxite in China and diminishing global reserves of high quality ore has seen a growing impetus for refiners and smelters to secure a long term supply of high quality ore;

• There is a significant opportunity for Lindian to enter the market as a premium quality niche bauxite supplier with forecast of a significant shortfall of high quality, low temperature bauxite.

Initial Sampling Completed as Part of Due Diligence

Details of the sampling program set out below with the appropriate JORC table annexed to this announcement.

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Farm in Terms

Under the Agreement, Lindian has the right to earn up to a 75% interest in the Project as follows:

• a) Lindian will earn an initial 51% interest in Batan by spending AUD$400,000 over 12 months on exploration work in accordance with an agreed work program, budget and management plan setting out key deliverables and responsibilities to be agreed by the parties ( Stage 1 Farm in Expenditure ). Exploration work will include data acquisition, digitization and deskwork interpretation, detailed geological mapping aiming at establishing the extend of mineralization as well testing other bauxite occurrences within the Project, grab sampling for preliminary observation of grades, trenching excavation and pitting to test mineralization widths and gather other information and drilling of approximately 1,200m. The aim of the Stage 1 Farm in Expenditure is to establish an initial JORC resource and identify other bauxite occurrences within the Project.

• b) After completion of Lindian obtaining the Stage 1 Interest, Lindian will have 3 months to exercise its right to move from a 51% to a 75% interest in the Project (through ownership of Batan) by spending a further minimum AUD$1.4m in accordance with an agreed work program, budget and management plan and taking the Project to an advanced feasibility stage which aims to demonstrate a commercially acceptable Project IRR and NPV (“ Stage 2 Interest ”).

• c) Lindian will have 18 months to earn the Stage 2 Interest. In the event that Lindian does not elect to move to Stage 2, its interest will revert to 49%;

• d) Batan or nominee will retain a 1.5% FOB Gross Royalty in relation to any bauxite sold which was produced and recovered from the Project Tenements;

• e) In addition to agreeing to Lindian’s farm in rights above, Batan or its nominee will be entitled to the following shares in Lindian calculated at $0.02 per share in respect of Tranche 1 and $0.02 per share in respect of Tranches 2:

• (i) $200,000 worth of Lindian shares upon deal Completion;

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• (ii) $200,000 worth of Lindian shares upon Lindian exercising its right to proceed to earn the Stage 2 Interest in clause 3(b) above; and

• (iii) In respect of each tranche of shares above, 50% of the shares issued will be held in escrow for 6 months from the date of issue.

• f) The Agreement is subject to 90 days due diligence, formal agreements and any necessary regulatory / shareholder approvals.

Uyowa Gold Project Update and Recent Legislative Changes

A geological team is currently on site in preparation for the proposed diamond drilling program. The team is carrying out relogging of existing diamond core which was drilled by Lake Victoria Goldfields as well as a program of detailed geological mapping over the deposit.

As mentioned above, in line with the recent changes to Tanzania’s mining regulations, the vendor's 25% interest also includes the 16% government interest mandated upon the project reaching a production stage. As previously released on ASX, Lindian notes the background behind the legislative changes and the need for any mining project to be beneficial to all stakeholders involved be they government, local community and shareholders of companies funding exploration and development. In the Board’s opinion shareholders need to be cognisant of the initial changes made and how they evolve and are interpreted once operational. Tanzania is a significant mining and an oil and gas jurisdiction with a solid history of successful resource development.

As part of the Company’s continued focus on Tanzania, the Board is pleased to announce the appointment of existing Director Mr Asimwe Kabunga as Chairman.

For and on behalf of Lindian Resources Limited

Eddie King

Director

Lindian Resources Limited

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Section 1 Sampling Techniques and Data

Criteria	JORC Code explanation	Commentary
Sampling	 Nature and quality of sampling (eg cut	Grab/rock samples were collected in
techniques	channels, random chips, or specific	a non-systematic way within the
	specialised industry standard measurement	prospect in areas where outcrops
	tools appropriate to the minerals under	were exposed.
	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.  Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.  Aspects of the determination of mineralisation that are Material to the Public	The samples were collected in areas where there is outcrop. All samples were geologically logged by a suitably qualified geologist and all were taken to GST Geochemical Laboratory in Tanzania
	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 explanation
	may be required, such as where there is
	coarse gold that has inherent sampling
	problems. Unusual commodities or
	mineralisation types (eg submarine
	nodules) may warrant disclosure of detailed
	information.
Drilling	 Drill type (eg core, reverse circulation,	No drilling was undertaken
techniques	open-hole hammer, rotary air blast, auger,
	Bangka, sonic, etc) and details (eg 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). _
Drill sample	 Method of recording and assessing core	No drilling was undertaken
recovery	and chip sample recoveries and results
	assessed.
	 Measures taken to maximise sample
	recovery and ensure representative nature
	of the samples.
	 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.
Logging	 Whether core and chip samples have been	Logging was carried out on each of
	geologically and geotechnically logged to a	the samples including lithology,
	level of detail to support appropriate Mineral	amount of weathering by a suitably
	Resource estimation, mining studies and	qualified geologist.
	metallurgical studies.	Data is initially conducted on paper
	 Whether logging is qualitative or	logging sheets and is then
	quantitative in nature. Core (or costean,	transferred to access database
	channel, etc) photography.	Not applicable
	 The total length and percentage of the
	relevant intersections logged.
Sub-	 If core, whether cut or sawn and whether	Each sample was analysed with no
sampling	quarter, half or all core taken.	sub sampling undertaken
techniques	 If non-core, whether riffled, tube sampled,

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Criteria	Criteria		JORC Code explanation	Commentary
and	sample		rotary split, etc and whether sampled wet or	All sampling was carefully supervised
preparation			dry.	with ticket books containing pre-
			 For all sample types, the nature, quality and	numbered tickets placed in the
			appropriateness of the sample preparation	sample bag and double checked
			technique.	against the ticket stubs and field
			 Quality control procedures adopted for all	sample sheets to guard against mix
			sub-sampling stages to maximise	ups
			representivity of samples.
			 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.
			 Whether sample sizes are appropriate to
			the grain size of the material being
			sampled.
Quality		of	 The nature, quality and appropriateness of	The samples were analyzed using
assay		data	the assaying and laboratory procedures	XRF. Standard samples were
and			used and whether the technique is	inserted both before and after
laboratory			considered partial or total.	analysis.
tests			 For geophysical tools, spectrometers,	The samples were pulverized, the
			handheld XRF instruments, etc, the	powder pressured without a binder,
			parameters used in determining the	then the Oxides of Aluminum, Silicon,
			analysis including instrument make and	Iron and Titanium determined. The
			model, reading times, calibrations factors	sample was then heated to 950 to
			applied and their derivation, etc.	determine LOI
			 Nature of quality control procedures	Standard samples were inserted for
			adopted (eg standards, blanks, duplicates,	calibration both before and after
			external laboratory checks) and whether	sample analysis.
			acceptable levels of accuracy (ie lack of
			bias) andprecision have been established.
Verification			 The verification of significant intersections	Data was recorded by the sampling
of	sampling		by either independent or alternative	geologist and stored in the
and	assaying		company personnel.	company’s access database. The
			 The use of twinned holes.	samples are transported to the GST
			 Documentation of primary data, data entry	Lab in Dodoma after initial
			procedures, data verification, data storage	preparation at SGS Mwanza.
			(physical and electronic) protocols.
			 Discuss any adjustment to assay data.
Location		of	 Accuracy and quality of surveys used to	A hand-held GPS was used to
data	points		locate drill holes (collar and down-hole	identify the position of all samples (xy
			surveys), trenches, mine workings and	horizontal error of 5 metres) and
			other locations used in Mineral Resource	reported using ARC 1960 grid and
			estimation.	UTM datum zone 37 south.
			 Specification of the grid system used.
			 Quality and adequacy of topographic
			control.
Data spacing			 Data spacing for reporting of Exploration	 Samples were taken in areas of
and distribution			Results.  Whether the data spacing and distribution is sufficient to establish the degree of	outcrop.  The sampling will not be used to establish a Mineral
			geological and grade continuity appropriate	Resource.
			for the Mineral Resource and Ore Reserve
			estimation procedure(s) and classifications
			applied.
			 Whether sample compositing has been
			applied.
Orientation of			 Whether the orientation of sampling	Samples were taken at surface at the
data		in	achieves unbiased sampling of possible	deposit is interpreted to be flat lying,
relation		to	structures and the extent to which this is	drillingor systematic trenchingwill

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Criteria		JORC Code explanation	Commentary
geological		known, considering the deposit type.	need to be completed to obtain
structure		 If the relationship between the drilling	unbiased sampling on the
		orientation and the orientation of key	mineralization.
		mineralised structures is considered to
		have introduced a sampling bias, this
		should be assessed and reported if
		material.
Sample		 The measures taken to ensure sample	Transportation is carried out by
security		security.	company staff driving the samples to
			the lab directly from site
Audits	or	 The results of any audits or reviews of	No audits or reviews have yet been
reviews		sampling techniques and data.	under taken

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Section 2 Reporting of Exploration Results

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

Criteria	Criteria	JORC Code explanation	Commentary
Mineral		 Type, reference name/number, location and	Prospecting licenses
tenement and		ownership including agreements or material	applications PL/11176/2017,
land	tenure	issues with third parties such as joint ventures,	PL/11176/2017, and
status		partnerships, overriding royalties, native title	PL/11176/2017 were made
		interests, historical sites, wilderness or national	on the 22ndof June 2017 and
		park and environmental settings.	are all expected to be
		 The security of the tenure held at the time of	granted shortly. The areas
		reporting along with any known impediments to	covered by the prospecting
		obtaining a licence to operate in the area.	licenses are 0.26km2, 49.3
			km2and 3.64 km2
			respectively. The Licenses
			are situated in the Lushoto
			District in Tanga region
			Tanzania.
			The PL’s are held by East
			Africa Bauxite Limited
			incorporated in Tanzania.
			The surface area is
			administered by the
			Government as native title.
			The area is rural, with
			wilderness areas and
			subsistence farming
			occurring on the PL. The
			Tenements are subject to a
			6% royalty on production.
			There are no other known
			issues that may affect the
			tenure.
Exploration		 Acknowledgment and appraisal of exploration by	The location of the Bauxite
done by other		other parties.	has been know since the
parties			1920’s in 2003 the University
			of Dar es Salaam production
			a report on the project area
			which included assays
			results in the 40-69% by
			weight Al2O3with variable but
			generally low levels of silica
			Previous production on the
			tenure was used in the
			cement making industry and
			for road construction and no
			records of the exploration or
			production figures have been
			located from the mining
			operation.
Geology		 Deposit type, geological setting and style of	The exploration targets occur
		mineralisation.	in the basement rocks of the
			Mozambique belt system
			which principally comprise
			metamorphic rocks. It is
			characterized by presence of
			red brown lateritic soils and
			kaolinitic clays resulting from
			deep weathering. The
			deposits are originatingfrom

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Criteria JORC Code explanation Commentary
weathering of granulites and feldspathic gneisses.
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: 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. No Drilling was completed.
Data aggregation methods  In reporting Exploration Results, 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.  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. Data was not aggregated
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 (eg ‘down hole length, true width not known’). Samples were taken from surface outcrops exposures within the pit indicate a flat lying geometry to the mineralization.
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. A map of the location of the samples is shown in figure 2
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 are reported
Other substantive exploration data  Other exploration data, if meaningful and material, should be reported 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, Assaying focused on Al2O3 and SiO2content on the mineralization. The next round of test-work will include an analysis of reactive silica and available

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Criteria	JORC Code explanation	Commentary
	groundwater, geotechnical and rock	alumina.
	characteristics; potential deleterious or
	contaminating substances.
Further work	 The nature and scale of planned further work (eg	Exploration is now at the
	tests for lateral extensions or depth extensions or	reconnaissance stage,
	large-scale step-out drilling).	trenching and drilling will
	 Diagrams clearly highlighting the areas of	follow to define a JORC
	possible extensions, including the main	compliant Resource
	geological interpretations and future drilling
	areas, provided this information is not
	commercially sensitive.

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