METALS AUSTRALIA LTD — Capital/Financing Update 2017

Oct 24, 2017

ASX Announcement

25 October 2017

Sampling Program at Lac du Marcheur Cobalt Project Confirms Cobalt Mineralisation and Potential

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Highlights:

• Small-scale Phase I sampling program has confirmed the presence of cobalt mineralisation at the Lac du Marcheur Cobalt Project, located in Quebec (Canada)

• Broader mapping and prospecting of historic copper-cobalt and nickel-cobalt showings, and historic exploration pits was also completed

• Samples were focused on the Lac Pauzé Showing where historical results have identified cobalt mineralisation of 0.18% Cobalt, 0.23% Copper and 0.34% Nickel

• Assay results from the samples collected during the Company’s Phase I program at the Lac Pauzé prospect included:

• Sample 128478 returned a result of 2,360 ppm Cobalt, 2,700 ppm Copper and 1,790 ppm Nickel (select chip sample)

• Sample 128479 returned a result of 362 ppm Cobalt, 2,930 ppm Copper and 693 ppm Nickel (grab sample)

• Sample results by the Company support the historic, and indicates the strongest prospectivity is in the Lac Pauzé Showing area, with further work required to define the extent of the cobalt mineralisation as well as better define the structural characteristics of the mineralisaton

• Additional prospecting remains over parts of the property not yet assessed

• Further cobalt projects opportunities are currently being evaluated by the Company - focus is on cobalt projects hosted in silver-cobalt veins

• Due diligence currently underway on a further cobalt project opportunity in the Cobalt Mining Camp of Ontario (Canada)

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Diversified metals exploration company, Metals Australia Ltd (ASX: MLS ) is pleased to announce the results of the Phase I sampling and field mapping exploration program at the Lac du Marcheur Cobalt Project, located in Quebec, Canada.

The Lac du Marcheur Cobalt Project is located in the Lanaudière region, located in southern Quebec, Canada.

The Lac du Marcheur Cobalt Project covers an area of 1,780 hectares representing 35 active mineral claims, as well as an additional two pending claims hosting the Lac Pauzé showings (total of 119 ha), and is situated north and south of CBLT Inc. (TSX-V: CBLT) Chilton Cobalt Project.

The global focus on renewable energy and the associated adoption of lithium-ion batteries as an energy storage medium has meant that the immediate inputs required for the manufacture of the lithium-ion battery are gaining significant attention with both investors and mining exploration companies. MLS is positioning itself to be at the forefront of this transformational technological revolution.

Commenting on the completion of the field exploration program at Lac du Marcheur, Director of MLS, Mr Gino D’Anna stated:

“The Lac du Marcheur cobalt project boasts numerous historic showings including several exploration pits. This initial phase of exploration focused sampling on the historic Lac Pauzé Showing and outcrops that lie adjacent.

We focused on the Lac Pauzé Showing where historic sample assays returned results of 0.18% Co which is encouraging and demonstrates the potential of the area.

Through our program, we have been able to replicate and improve upon the historic results, with one of our rock samples returning an assay result of 0.24% Co at the main Lac Pauzé Showing. Moreover, a large portion of the property remains to be prospected.

Due diligence is also now underway on an additional cobalt project opportunity with a focus on high grade vein style projects such as those in the main Cobalt Mining Camp of Ontario, Canada.”

The Lac du Marcheur Cobalt Project hosts excellent infrastructure with Montreal situated less than 100km to the south and a regional highway crossing the project. In addition, a number of forestry and ATV trails exist on the project which facilitate exploration.

Completion of Field Exploration Program

The Lac du Marcheur Cobalt Project contains the Lac Pauzé and Lac Pauzé-Ouest cobalt-coppernickel showings and is on strike with a number of other documented cobalt-copper-nickel showings, including (from north to south) SC-95-02, Lac Baume, Chilton Nickel, Lac Sicotte, Lac du Marcheur and Lac Sicotte-Est. The Lac du Marcheur Showing is located on the northern border of the South Block of the Lac du Marcheur Cobalt Project.

The mineralisation is in the form of disseminated sulphides and stockworks (veins and veinlets) of massive sulphides filling fractures in the anorthositic gabbros, commonly at or near contacts with quartzites. Historic samples taken from the Lac du Marcheur Cobalt Project - Lac Pauzé Showing (located in Entrelacs Township) returned assays up to 1,765 ppm (0.18%) cobalt, 0.23% copper and 0.34% nickel (MERNQ GM 54214, GM 54928, GM 55347, and GM 55906). The Lac Pauzé Showing is exposed via a road cut and is easily visable and accessible from the highway.

As part of the Phase I program, Dahrouge Geological Consulting Ltd were engaged to complete a prospecting and sampling program with a particular focus on the Lac Pauzé Showing, resulting from the significance of the historic mineralisation that had been encountered. The primary

objective of the program was to confirm the historic high-grade copper-nickel-cobalt mineralisation documented on the Project from the existing outcrops dating from the early 1960s. In addition, reconnaissance prospecting and sampling was completed throughout the Project.

Due to the limited nature of the field program (8 days), only a total of sixty (60) samples were collected throughout the project area. The Company viewed this as a prudent approach to ensure that exploration expenditure was managed efficiently and to ensure that the Company was able to determine the most effective method of exploration.

Assay results from grab samples collected at the Lac Pauze prospect during the field program included:

• Sample 128478 returned a result of 2,360 ppm Cobalt, 2,700 ppm Copper and 1,790 ppm Nickel (select chip sample)

• Sample 128479 returned a result of 362 ppm Cobalt, 2,930 ppm Copper and 693 ppm Nickel (grab sample)

Sample results by the Company support the historic, and indicates the strongest prospectivity is in the Lac Pauzé Showing area, with further work required to define the extent of the cobalt mineralisation as well as better define the structural characteristics of the mineralisaton.

Additional prospecting remains over parts of the property not yet assessed

The images below illustrate the historic exploration that occurred at the Lac Pauzé copper-nickelcobalt showing as well as other areas identified within the Lac du Marcheur Cobalt Project.

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Image 1: Sample site at the Lac Pauzé copper-nickelcobalt showing area

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Image 2: Historic exploration pit at the Lac du Marcheur cobalt project

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Image 3 (above): Historic exploration pit-1 at Lac Pauze copper-nickel-cobalt showing

Image 4 (top right): Historic exploration pit-2 at Lac Pauze copper-nickel-cobalt showing

Image 5 (right): Typical stockworks identified at the Lac du Marcheur project historic showings

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Access to the Lac du Marcheur Cobalt Project is excellent and is supported by a system of service roads. The images below identify the typical secondary road networks that support access to the Lac du Marcheur Cobalt Project.

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Image 6 and 7 : Typical access roads in and around the Lac du Marcheur Cobalt Project

During the field program, a number of sulphide enriched zones were sampled along outcrop areas to assist in the definition of the mineralisation model at Lac du Marcheur. Future work will concentrate on outlining these zones of mineralisation and assessing the correlation between the presence of cobalt with other metals such as nickel, copper, and zinc.

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Image 8: Suphide enriched zone in outcrop sampled at the Lac du Marcheur cobalt project

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Image 9: Sulphide enriched zone in outcrops at the Lac du Marcheur cobalt project

Summary

The Lac Pauzé Showing within the Lac du Marcheur Cobalt Project has been the subject of historical exploration. The Company believes that modern exploration and channel sampling will open up a significant amount of strike length of known structures for modern cobalt focused exploration.

ENDS

For more information, please contact:

Gino D’Anna Director Metals Australia Ltd Phone: +61 400 408 878

Competent Person Statement

The information in this announcement that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves, as applicable, is based on information compiled by Mr. Darren L. Smith, P. Geol., a Competent Person who is a Professional Geologist registered with L’Ordre des géologues du Québec, in Canada. Mr. Darren L. Smith, P.Geol, is an employee of Dahrouge Geological Consulting Ltd. (Dahrouge). Dahrouge Geological Consulting Ltd. and all competent persons are independent from the issuer of this statement, MetalsTech Limited. Mr. Darren L. Smith has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr. Darren L Smith consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.

Appendix A: Rock Sample Analytical Results

Analyte
Symbol			Co	Cu	Ni
Unit Symbol			ppm	ppm	ppm
Detection Limit			1	1	1
Analysis	UTM-E,	UTM-N,	TD-	TD-	TD-
Method	Z18	Z18	**ICP **	**ICP **	**ICP **
19316	576285	5110452	248	1440	403
19317	575569	5111368	62	182	268
19318	575593	5111035	57	135	70
19319	574593	5112811	67	125	67
19320	574071	5113598	88	35	21
19321	577482	5109536	63	25	18
19322	578272	5109684	81	63	87
19323	578274	5109686	191	469	295
19324	578165	5109673	123	122	77
19325	578318	5109703	28	56	61
19326	578306	5109706	152	221	85
19327	578342	5109703	73	186	77
19328	577815	5109633	85	142	70
19329	576764	5109796	31	40	34
19330	574301	5112296	44	28	12
19331	574614	5112326	34	14	10
19332	574428	5112334	66	22	17
19333	574376	5112335	89	31	23
19334	575529	5111360	163	614	288
19335	574488	5112405	64	24	163
19336	575533	5111360	60	272	78
19337	575530	5111364	93	265	138
19338	575531	5111357	94	283	154
19339	575542	5111128	48	14	9
19340	571617	5115582	23	3	20
19341	571601	5114776	80	19	436
19342	571885	5115075	12	40	12
19343	575571	5110745	14	8	17
19344	571477	5115794	14	5	13
19345	571493	5115717	7	6	6
19346	571505	5115027	30	25	21
19347	571516	5115036	26	51	20
19348	571473	5114778	17	132	37
19349	571732	5115432	48	23	30
19350	575689	5110329	2	8	5
19351	575752	5110387	17	7	9
19352	575527	5111360	84	244	114

19353	575531	5111369	89	183	119
19354	572254	5118428	31	16	62
19355	572307	5118247	32	13	44
19356	572339	5117869	37	10	35
19357	572235	5117961	24	13	33
19358	572206	5117971	34	4	36
19359	575576	5110767	26	9	15
19360	575597	5110886	12	29	9
19361	572295	5116893	117	282	399
19362	572000	5117475	37	7	46
19363	572304	5117276	67	130	94
19364	572279	5117451	63	14	23
19365	574376	5112335	92	29	24
19366	574299	5112298	51	13	11
19367	574299	5112298	58	18	14
128476	578345	5109699	99	106	166
128477	578352	5109703	84	23	99
128478	578275	5109690	2360	2700	1790
128479	578269	5109692	362	2930	693
128480	578254	5109687	202	266	424
128481	578201	5109680	43	14	24
128482	573311	5114786	105	34	48
128483	573311	5114786	60	19	17

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JORC Code, 2012 Edition – Table 1

Section 1 Sampling Techniques and Data

Criteria		JORC Code explanation	JORC Code explanation	Commentary
Sampling		•	Nature and quality of sampling (eg cut channels, random chips, or specific specialised	No drilling completed to date.
techniques			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 samples comprise grab or chips considered to be representative of the immediate
		•	Include reference to measures taken to ensure sample representivity and the	area sampled.
			appropriate calibration of any measurement tools or systems used.
		• •	Aspects of the determination of mineralisation that are Material to the Public Report. In cases where ‘industry standard’ work has been done this would be relatively simple	Samples submitted for assay typically weigh 2-3 kg.
			(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	No channel sampling completed
			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, open-hole hammer, rotary air blast, auger,	No drilling completed.
techniques			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 and chip sample recoveries and results	Not applicable.
recovery		•	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/gainof fine/coarse material.
Logging		•	Whether core and chip samples have been geologically and geotechnically logged to a	All samples are described geologically with key geological observations of area also
			level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.	recorded.
		•	Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc)
			photography.	Logging is qualitative, based on visual field estimates.
		•	_The total length and percentage of the relevant intersections logged. _
Sub-sampling		•	If core, whether cut or sawn and whether quarter, half or all core taken.	Sample preparation follows industry best practice standards and is conducted by
techniques and sample		• •	If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. For all sample types, the nature, quality and appropriateness of the sample preparation	internationally recognised Activation Laboratories Ltd at their Ancaster facility.
preparation			technique.	Sample prep followed Code RX1 - Crush (< 7 kg) up to 80% passing 10 mesh, riffle
		•	Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.	split (250 g) and pulverize (mild steel) to 95% passing 105μ
		•	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.	No blanks or standards were submitted with laboratory internal QAQC relied upon.
		•	Whether sample sizes are appropriate to the grain size of the material being sampled.
				Samples are representative of point locations only with fresh material collected as
				much aspractical for analysis. Approximatly2-3 kgare estimated for each sample and

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Criteria			JORC Code explanation	JORC Code explanation	Commentary
					is considered satisfactoryfor this type of samplingtechnique.
Quality	of assay		•	The nature, quality and appropriateness of the assaying and laboratory procedures	Assay and laboratory procedures have been selected following a review of techniques
data and laboratory tests			•	used and whether the technique is considered partial or total. For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times,	provided by internationally certified laboratories.
				calibrations factors applied and their derivation, etc.	Samples were submitted for multi-element analysis by Activation Laboratories using
			•	Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.	code 1F2 – 4 Acid, ICP-OES, and for precous metals using code 1C-OES – fire assay, ICP-OES.
					No blanks or standards were submitted with laboratory internal QAQC relied upon.
Verification		of	•	The verification of significant intersections by either independent or alternative	None undertaken.
sampling		and	•	company personnel. The use of twinned holes.
assaying			•	Documentation of primary data, data entry procedures, data verification, data storage	Not applicable.
				(physical and electronic) protocols.
			•	Discuss any adjustment to assay data.	All field data is manually collected, entered into excel spreadsheets, and validated.
					Electronic data is stored in Quebec.
					All electronic data is routinely backed up.
					No data adjustment has been completed.
Location of		data	•	Accuracy and quality of surveys used to locate drill holes (collar and down-hole	Hand held GPS used for X-Y-Z locations, with typical accuracy of 2-5 m.
points				surveys), trenches, mine workings and other locations used in Mineral Resource estimation.
			•	Specification of the grid system used.	Coordinate system NAD88, Zone 18
			•	Quality and adequacy of topographic control.
Data	spacing		•	Data spacing for reporting of Exploration Results.	Only reconnaissance sampling completed – spacing variable and based on outcrop
and distribution			•	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	location and degree of exposure.
				estimation procedure(s) and classifications applied.
			•	Whether sample compositing has been applied.	Not applicable.
					No sample compositingcompleted
Orientation of data in relation to geological			• •	Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type. 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	Samples were of point locations focused along road cut exposures. Geological structure not assessed.
structure				and reported if material.

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Criteria		JORC Code explanation	JORC Code explanation	Commentary
Sample	security	•	The measures taken to ensure sample security.	Geological team supervises all sampling and subsequent storage in the field. The same
				geological team organizes shipment of samples to Activation Laboratories in Ancaster,
				ON. Chain of custodyis well known.
Audits	or	•	The results of any audits or reviews of sampling techniques and data.	None completed.
reviews

Section 2 Reporting of Exploration Results

Criteria		JORC Code explanation	JORC Code explanation	Commentary
Mineral		•	Type, reference name/number, location and ownership including agreements or	Metals Australia Limited is the 100% owner of the Lac du Marcheur Cobalt Project
tenement land	and tenure		material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.	pursuant to the acquisition agreement.
status		•	The security of the tenure held at the time of reporting along with any known	There are no other material issues affecting the active tenements. Although the two
			impediments to obtaining a licence to operate in the area.	pending claims, which host the Lac Pauzé Showing, are subject to partial withdrawl due
				to new regulations. It is also possible that no area is withdrawn; however, some added
				uncertainty exists. Clairty is expected in the first half of 2018.
				All tenements are in good standing and have been legally validated by a Quebec
				lawyer specialisingin the field,not withstandingthe twopendingclaims.
Exploration		•	Acknowledgment and appraisal of exploration by other parties.	No modern exploration has been conducted.
done by	other
parties				Government mapping records multiple cobalt bearing outcrops within the project areas
				but no other data is available.
Geology		•	Deposit type, geological setting and style of mineralisation.	Lac du Marcheur Cobalt Project
				Geologically, the rocks of the Lac du Marcheur Cobalt Project are within the Grenville
				Province of the Canadian Shield. The project is underlain by the same north-south
				trending package of gabbroic to anorthositic rocks (Morin Intrusive Suite) that underlie
				the Hinterland Metals 100% owned Chilton Cobalt Project.
				The Lac du Marcheur Cobalt Project contains the Lac Pauzé and Lac Pauzé-Ouest
				cobalt-copper-nickel showings and is on strike with a number of other documented
				cobalt-copper-nickel showings, including (from north to south) SC-95-02, Lac Baume,
				Chilton Nickel, Lac Sicotte, Lac du Marcheur and Lac Sicotte-Est. The Lac du Marcheur
				showing is located on the northern border of the South Block of the newly acquired Lac
				du Marcheur Cobalt Project.

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Criteria		JORC Code explanation	JORC Code explanation	Commentary
				According to the Ministère de l'Énergie et des Ressources Naturelles ("MERNQ")
				database (http://sigeom.mines.gouv.qc.ca), these various local showings, with various
				amounts of pyrrhotite, pentlandite and chalcopyrite mineralisation have returned assays
				of up to 2,500 ppm (0.25%) cobalt, 1.11% copper, 1.23% nickel and 12.7 g/t silver in
				surface grab and trench samples associated with gabbros, gabbroic anorthosites and
				quartzites.
				The mineralisation is in the form of disseminated sulphides and stockworks (veins and
				veinlets) of massive sulphides filling fractures in the anorthositic gabbros, commonly at
				or near contacts with quartzites. Grab samples taken from the Lac du Marcheur Cobalt
				Project - Lac Pauzé Showing (located in Entrelacs Township) returned assays up to
				1,765 ppm (0.18%) cobalt, 0.23% copper and 0.34% Ni (MERNQ GM 54214, GM
				54928, GM 55347, and GM 55906).
				The mineralisation is in the form of disseminated sulphides and stockworks (veins and
				veinlets) of massive sulphides filling fractures in the anorthositic gabbros, commonly at
				or near contacts with quartzites.
				Similar sulphide-bearing mafic to ultramafic zones, associated with anorthositic
				intrusions, have generated significant amounts of interest, such as the Lac St-Jean and
				the Manicouagan complexes, and the Main Plutonic Suite (Voisey’s Bay).
Drill	hole	•	A summary of all information material to the understanding of the exploration results	No drilling completed
Information			including a tabulation of the following information for all Material drill holes: o easting and northing of the drill hole collar
			o elevation or RL (Reduced Level – elevation above sea level in metres) of the drill
			hole collar
			o dip and azimuth of the hole
			o down hole length and interception depth
			o hole length.
		•	If the exclusion of this information is justified on the basis that the information is not
			Material and this exclusion does not detract from the understanding of the report, the
			_Competent Person should clearly explain why this is the case. _
Data		•	In reporting Exploration Results, weighting averaging techniques, maximum and/or	Grades reported as received
aggregation			minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.
methods		•	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

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Criteria		JORC Code explanation	JORC Code explanation	Commentary
			_stated. _
Relationship		•	These relationships are particularly important in the reporting of Exploration Results.	Not applicable as sampling is of point locations
between mineralisation		• •	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
widths	and		statement to this effect (eg ‘down hole length, true width not known’).
intercept
lengths
Diagrams		•	Appropriate maps and sections (with scales) and tabulations of intercepts should be	None included.
			included for any significant discovery being reported These should include, but not be
			_limited to a plan view of drill hole collar locations and appropriate sectional views. _
Balanced		•	Where comprehensive reporting of all Exploration Results is not practicable,	Results for all sampling completed are listed in Appendix A attached to the body of this
reporting			representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.	report.
Other		•	Other exploration data, if meaningful and material, should be reported including (but not	All meaningful and material data is reported.
substantive exploration data			limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or
			_contaminating substances. _
Further work		•	The nature and scale of planned further work (eg tests for lateral extensions or depth	Additional prospecting over remainder of property
			extensions or large-scale step-out drilling).
		•	Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not	Channel sampling
			commercially sensitive.