NEOMETALS LTD — Regulatory Filings 2017

Sep 10, 2017

11 September 2017

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BARRAMBIE TITANIUM PROJECT ‐ UPDATE

HIGHLIGHTS

• Neometals commences pilot‐scale beneficiation test work on Barrambie ore to produce concentrates for the ‘Neomet Process’ Pilot Plant and for a Direct Shipping operation.

• Significant high‐grade intercepts returned from recent metallurgical drilling include:

• 40.0 metres at 34.6% TiO2 and 0.72% V2O5, from surface

• 40.0 metres at 34.4% TiO2 and 0.66% V2O5, from surface

• 40.0 metres at 34.1% TiO2 and 0.70% V2O5, from surface

• 40.0 metres at 33.6% TiO2 and 0.64% V2O5, from surface

• 40.0 metres at 31.8% TiO2 at 0.85% V2O5, from surface

• 40.0 metres at 31.5% TiO2 and 0.69 % V2O5, from surface

• Significant intercepts returned from maiden exploration drilling at Virginia Hills prospect includes:

• 14 metres at 18.2% TiO2 and 0.47% V2O5

• 18 metres at 18.1% TiO2 and 0.42 % V2O5

Neometals Ltd (ASX: NMT) (“Neometals”) is pleased to announce it has commenced pilot‐scale beneficiation test work as it advances development plans for Barrambie Titanium Deposit in WA, one of the world’s highest‐grade titanium deposits.

The Company’s project engineers, Sedgman Ltd, have updated the Pre‐feasibility Study (“PFS”) with optimisation test work results using the Neomet Process to produce Titanium Hydrolysate (TiO2.2H2O). The associated engineering study indicates the Neomet Process can be integrated with existing titanium pigment plants at minimal cost and modification. The advantages of the revised combined process are reduced operating cost, easier operations, higher purity final products and improved environmental footprint.

The original PFS, (see ASX announcement 25 August 2015) indicated potential operating costs of US$572/t titanium dioxide pigment. The current median price for high quality titanium dioxide pigment is US$2,950 per tonne on a CIF basis to USA (source: Industrial Minerals, 7 September 2017).

The revised Neomet Process will undergo pilot trials in late 2017. Neometals plans to licence the Neomet Process to titanium industry partners conditional on the entry into a long‐term, take‐or‐ pay offtake agreement for Barrambie titanium concentrates.

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In parallel with the pilot evaluation of titanium hydrolysate production the Company will evaluate a fast‐track start‐up of Barrambie as a direct shipping operation. The ore would undergo toll‐ concentration a titaniferous magnetite concentrate in China for supply as feedstock to Chinese titanium pigment producers. On the 7[th] August 2017, the Chinese government announced the permanent closure of 89 ore processing companies in Sichuan province, constraining ilmenite production and limiting supply.

Drilling Results

In June and July twenty (20) holes were drilled within the TiO2 starter pit area to collect samples for metallurgical test work. Holes were drilled using diamond drilling techniques producing PQ core sample. Core was geologically logged on site, and shipped to Perth for cutting and quarter core sampling. Sampling was conducted on 1m intervals downhole for the first 40 metres only of each hole to correspond with the starter pit depth. Sampling of remainder of the core will commence this month.

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Figure 1: Cross Section 12600N within Northern Starter Pit showing recent metallurgical core hole

A further twenty‐one (21) Resource Extension‐holes were drilled across three (3) traverses to test strike extensions of the Barrambie deposit as well as a structural repetition of the mineralised unit to the west of Barrambie (Virginia Hills). Drill traverses were located at Barrambie North, Ballanhoe Hills and Virginia Hills (see Figure 4 of Appendix A).

Resource extension‐holes were drilled using the reverse circulation (RC) technique by Challenge Drilling with samples collected on a per metre basis using face sampling hammers. The 1 metre composite samples were reduced in size using a cone splitter to produce one sample of 3 to 4 kg weight for each metre for assaying. It is estimated that greater than 95% of samples reported to the splitter device dry.

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Geological logging of both RC and diamond core was completed in sufficient detail to support reporting of exploration results. Logging was both qualitative and quantitative; full descriptions were recorded on standard logging forms of lithology, alteration, and oxidation as well as percentage estimates of alteration minerals, and veining.

Sample preparation and analysis was conducted by Intertek. Whole rock analysis of a standard iron ore suite was conducted by lithium borate fusion and ICP finish. The metallurgical drilling and resource extension drilling and assay details are set out at Table 3 and 4 of Appendix A: Supporting Information.

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Figure 2: Barrambie Project Geology showing location of recent drilling.

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Metallurgical Pilot Test work

The Company has commenced the pilot scale beneficiation test work at Nagrom Metallurgical laboratories in Perth. The concentrate that will be produced will be supplied to Chinese titanium producers and for the pilot scale test work of the Neomet Process at the Company’s facility in Montreal, Canada.

Results of the beneficiation test work are expected in the December Quarter and hydrometallurgical test work is expected to commence late in the December Quarter. Both are key outputs for the commercialisation of the project.

Starter Pit	0m to 10m TiO2	10m to 20m TiO2	20m to 30m TiO2	30m to 40m TiO2
North	25.4%	28.2%	25.5%	23.4%
Central	25.8%	27.4%	31.0%	29.5%
South	25.3%	27.3%	27.8%	26.3%

Table 1: TiO2% Grades for 10m Composites within Starter Pits

ENDS

For further information, please contact:

Chris Reed Media Managing Director Michael Weir Neometals Ltd Citadel MAGNUS T: +61 8 9322 1182 T: +61 8 6160 4900 E: info@neometals.com.au

COMPETENT PERSONS STATEMENT

The information in this market announcement is extracted from the reports entitled Barrambie Resource Estimate December 2013, and Barrambie Prefeasibility Study August 2015 and announced 6 December 2013 and 25 August 2015.

Neometals Ltd confirms it is not aware of any new information or data that materially affects the information in the original market announcements relating to Barrambie mineral resources and pre‐ feasibility study, that all material assumptions and technical parameters underpinning the Barrambie mineral resource estimate 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.

The information in this announcement that relates to Exploration Targets is based on information compiled by Clay Gordon, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy and Australia Institute of Geoscientists. Mr Gordon is employed by Advance Geological Consulting Pty Ltd, an independent consultant to Neometals Limited. Mr Gordon 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 Gordon consents to the inclusion in this announcement of the matters based on information in the form and context in which it appears.

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APPENDIX A: SUPPORTING INFORMATION

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Figure 3: Barrambie Titanium Project – location plan

JORC Mineral Resources

Barrambie Titanium Project has Mineral Resources of 47.2 million tonnes at 22% TiO2 (total Indicated and Inferred) (announcement ASX:RDR 6 December 2013).

Category JORC 2012	Tonnage (Mt)	TiO2 (%)	V2O5 (%)	Fe2O3 (%)	Al2O3 (%)	SiO2 (%)
Indicated	34.7	22.25	0.64	46.77	9.48	14.95
Inferred	12.5	21.99	0.58	46.51	9.32	15.40
Total	47.2	22.18	0.63	46.70	9.44	15.07

Table 2: Barrambie Titanium Project – Mineral Resources (above 15% TiO2 block cut off)

The ferrovanadium titanium (Ti‐V‐Fe) deposit occurs within the Archaean Barrambie Greenstone Belt, a narrow, NNW‐SSE trending greenstone belt in the northern Yilgarn Craton. The linear greenstone belt is about 60 km long and attains a maximum width of about 4 km. The Barrambie Sill extends over a distance of at least 25 km approximately half of which is covered by Neometal’s tenements where is varies in width from 500 m to 1700 m.

The sill is comprised of anorthositic magnetite‐bearing gabbros that intrude a sequence of metasediments, banded iron formation, metabasalts and metamorphosed felsic volcanics of the Barrambie Greenstone Belt. The metasediment unit forms the hanging‐wall to the layered sill complex.

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Ti‐V‐Fe mineralisation occurs as bands of cumulate aggregations of vanadiferous magnetite (martite)‐ilmenite (leucoxene) in massive and disseminated layers and lenses. Titanium rich horizons tend to be focussed in the relatively wider band on the eastern margin of the Sill.

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Figure 4: Barrambie Sill geology, location of starter pits and recent metallurgical drill holes.

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Figure 5: Barrambie deposit 3D geology

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Target	Drill Hole Number	Easting Northing Co‐ordinates GDA 94	dip Azimuth Depth	from to width TiO2 % V2O5 % sample (m) (m) (m)
Barrambie	BDDH050 BDDH051 BDDH052 BDDH053 BDDH054 BDDH055 BDDH056 BDDH057 BDDH058 BDDH059 BDDH060 BDDH061 BDDH062 BDDH063 BDDH064 BDDH065 BDDH066 BDDH067 BDDH068 BDDH069	710200 6962100 710138 6962189 710111 6962247 710064 6962308 710056 6962383 710050 6962473 710047 6962530 710043 6962586 710028 6962692 709075 6965106 709028 6965172 708988 6965210 708933 6965291 708965 6965426 708906 6965506 708874 6965545 708850 6965587 708816 6965626 708773 6965663 708714 6965740	‐85 240 71 ‐85 60 71 ‐90 000 71 ‐90 000 71 ‐90 000 71 ‐80 240 71 ‐90 000 71 ‐85 60 71 ‐85 60 71 ‐85 240 71 ‐90 000 71 ‐85 60 71 ‐80 240 71 ‐70 240 71 ‐85 60 71 ‐90 000 71 ‐85 240 71 ‐80 240 71 ‐80 240 71 ‐70 60 71	0.0 40.0 40.0 24.9 0.63 Qtr PQ core 0.0 40.0 40.0 29.1 0.63 Qtr PQ core 0.0 40.0 40.0 16.9 0.38 Qtr PQ core 0.0 40.0 40.0 34.1 0.70 Qtr PQ core 0.0 40.0 40.0 17.2 0.59 Qtr PQ core 0.0 40.0 40.0 30.0 0.72 Qtr PQ core 0.0 40.0 40.0 29.8 0.73 Qtr PQ core 0.0 40.0 40.0 29.2 0.70 Qtr PQ core 0.0 40.0 40.0 28.7 0.65 Qtr PQ core 0.0 40.0 40.0 31.8 0.85 Qtr PQ core 0.0 40.0 40.0 34.6 0.72 Qtr PQ core 0.0 40.0 40.0 31.5 0.69 Qtr PQ core 0.0 40.0 40.0 15.9 0.48 Qtr PQ core 0.0 40.0 40.0 17.7 0.58 Qtr PQ core 0.0 40.0 40.0 30.9 0.76 Qtr PQ core 0.0 40.0 40.0 7.5 0.30 Qtr PQ core 0.0 40.0 40.0 34.4 0.66 Qtr PQ core 0.0 40.0 40.0 27.5 0.64 Qtr PQ core 0.0 40.0 40.0 33.6 0.64 Qtr PQ core 0.0 40.0 40.0 27.9 0.56 Qtr PQcore

Table 3: Drilling and Assay Details ‐ Barrambie Metallurgical Drilling (note: only samples 0 to 40m have been assayed to date)

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Figure 6: Maiden drill traverse at Virginia Hills, located 5km west of Barrambie titanomagnetite deposit.

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Target	Drill Hole Number	Easting Northing Co‐ordinates GDA 94	dip Azimuth Depth	to width TiO2 % V2O5 % sample (m) (m) (m) above 5% TiO2 from	to width TiO2 % V2O5 % sample (m) (m) (m) above 5% TiO2 from
Virginia Hills	VHRC113 VHRC114 VHRC115 VHRC116 VHRC117 VHRC118 VHRC119	705670 6961500 705690 6961517 705710 6961523 705730 6961535 705750 6961547 705770 6961558 705790 6961570	‐60 240 71 ‐60 240 71 ‐60 240 71 ‐60 240 71 ‐60 240 71 ‐60 240 71 ‐60 240 71	0.0 28.0 28.0 incl. 9.0 28.0 19.0 48.0 59.0 11.0 incl. 55.0 58.0 3.0 0.0 6.0 6.0 40.0 48.0 8.0 incl. 44.0 47.0 3.0 52.0 71.0 19.0 58.0 71.0 13.0 incl. 60.0 64.0 4.0 24.0 26.0 2.0 39.0 43.0 4.0 54.0 57.0 3.0 65.0 71.0 6.0 16.0 18.0 2.0 56.0 58.0 2.0 10.0 12.0 2.0 22.0 24.0 2.0 0.0	14.1 0.35 composite RC 16.4 0.41 composite RC 10.1 0.33 composite RC 21.1 0.51 composite RC 8.4 0.54 composite RC 12.5 0.34 composite RC 17.5 0.46 composite RC 17.7 0.42 composite RC 14.7 0.31 composite RC 18.4 0.38 composite RC 8.9 0.65 composite RC 9.0 0.64 composite RC 10.5 0.73 composite RC 10.6 0.71 composite RC 8.2 0.65 composite RC 8.5 0.62 composite RC 6.0 0.56 composite RC 9.2 0.84 composite RC NSI composite RC
Barrambie North	VHRC162 VHRC163 VHRC164 VHRC165 VHRC166 VHRC167 VHRC168	704500 6974710 704525 6974723 704550 6974736 704575 6974750 704600 6974763 704625 6974776 704650 6974790	‐60 240 71 ‐60 240 71 ‐60 240 71 ‐60 240 71 ‐60 240 71 ‐60 240 71 ‐60 240 71	0.0 29.0 29.0 52.0 59.0 7.0 67.0 71.0 4.0 0.0 21.0 21.0 42.0 49.0 7.0 0.0 2.0 5.0 3.0 20.0 26.0 6.0 0.0 3.0 3.0 7.0 10.0 3.0 17.0 23.0 6.0 28.0 30.0 2.0 0.0 38.0 38.0 0.0	5.8 0.46 composite RC 5.7 0.21 composite RC 5.4 0.18 composite RC 6.3 0.49 composite RC 5.4 0.17 composite RC NSI composite RC 6.5 0.59 composite RC 8.3 0.77 composite RC 9.9 0.78 composite RC 10.3 0.84 composite RC 7.1 0.57 composite RC 5.7 0.13 composite RC 5.5 0.53 composite RC NSI composite RC
Ballanhoe Hills	VHRC169 VHRC170 VHRC171 VHRC172 VHRC173 VHRC174 VHRC175	714730 6956020 714755 6956045 714780 6956070 714805 6956095 714830 6956120 714855 6956145 714880 6956170	‐60 225 71 ‐60 225 71 ‐60 225 71 ‐60 225 71 ‐60 225 71 ‐60 225 71 ‐60 225 71	0.0 0.0 0.0 8.0 11.0 3.0 26.0 32.0 6.0 6.0 9.0 3.0 13.0 16.0 3.0 23.0 29.0 6.0 44.0 52.0 8.0 56.0 67.0 11.0 0.0 5.0 5.0 15.0 21.0 6.0 26.0 38.0 12.0 61.0 69.0 8.0 40.0 43.0 3.0 50.0 52.0 2.0 55.0 68.0 13.0	NSI composite RC NSI composite RC NSI composite RC 6.5 0.59 composite RC 8.3 0.77 composite RC 9.9 0.78 composite RC 10.3 0.84 composite RC 7.0 0.57 composite RC 9.7 0.80 composite RC 14.4 1.23 composite RC 6.9 0.47 composite RC 10.2 0.72 composite RC 0.7 0.51 composite RC 11.1 0.85 composite RC 7.1 0.31 composite RC 5.6 0.35 composite RC 9.3 0.61 composite RC

Table 4: Drilling and Assay Details ‐ Barrambie Resource Extension Drilling

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JORC Table 1, Section 1, Sampling Techniques, and Data

Criteria	Commentary
Sampling techniques	The Barrambie resource extension drilling comprises 21 reverse circulation (RC) holes sampled on 1 m intervals. Drill cuttings were collected in a cyclone, passed through a cone splitter to create a sample 3 to 4 kg in weight for assaying. Metallurgical drilling comprises 20 PQ core holes. Core was ¼ cut for assayingin 1metre lengths.
Drilling techniques	Resource extension drilling was conducted by reverse circulation (RC) technique. Metallurgical drilling was conducted by PQ coring technique.
Drill sample recovery	A qualitative logging code was used to record recovery for the recent RC and DD drilling. Recoveryof samples is considered to begood.
Logging	Geological logging of core and rock chips was carried out recording lithology, major minerals, oxidation, colour, texture, mineralisation, water and recovery. The logging was carried out in sufficient detail to meet the requirements of resource estimation and miningstudies.
Sub‐sampling techniques and samplepreparation	All samples were dried, crushed to approximately 2mm, split and pulverised.
Quality of assay data and laboratorytests	No field QAQC data was conducted by Neometals. Intertek Genalysis conducted their own internalQAQC,with no issues beingreported.
Verification of sampling and assaying	Data was recorded in the field on paper logs and transferred to individual .xls files prior to merging with project database. No twin holes were drilled and no verification of significant intersections by independent laboratories has been undertaken.
Location of data points	Drill collar and azimuth were pegged in the field using GDA94 system byindependent surveyors.
Data spacing and distribution	Extension drill holes were spaced approximately on 30 metres centres across strike on three unrelated traverses. Metallurgical holes were spaced at 50m intervals alongthe strike of the Barrambie TiO2deposit.
Orientation of data in relation to geological structure	Extension holes were drilled across strike to achieve unbiased sampling of the known mineralised zone. Metallurgical holes were drilled within plane of the Barrambie mineralisation.
Sample security	Samples were stored onsite and transported to the laboratory on a regular basis byNeometals employees.
Audits or reviews	No audits or reviews of sampling techniques and data have been conducted.

JORC Table 1, Section 2, Reporting of Exploration Results

Criteria	**Commentary **
Mineral tenement and land tenure status	The Barrambie mineralisation is within 100% owned granted mining lease M57/173 in the Eastern Murchison Goldfields. No known impediments exist to operate in the area.
Exploration done by other parties	No relevant exploration has been completed by other parties to acknowledge or appraise at this time.
Geology	The ferrovanadium titanium (Ti‐V‐Fe) deposit occurs within the Archaean Barrambie Greenstone Belt, which is a narrow, NNW‐SSE trending greenstone belt in the northern Yilgarn Craton. The linear greenstone belt is about 60 km longand attains a maximum width of

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	about 4 km. It is flanked by banded gneiss and granitoids. The mineralisation is hosted within a large layered, mafic intrusive complex (the Barrambie Igneous Complex), which has intruded into and is conformable with the general trend of the enclosing Greenstone Belt. From aeromagnetic data and regional geological mapping, it appears that this layered sill complex extends over a distance of at least 25 km into tenements to the north and south of M57/173. The layered sill varies in width from 500 m to 1700 m. The sill is comprised of anorthositic magnetite‐bearing gabbros that intrude a sequence of metasediments, banded iron formation, metabasalts and metamorphosed felsic volcanics of the Barrambie Greenstone Belt. The metasediment unit forms the hanging‐wall to the layered sill complex. Exposure is poor due to deep weathering, masking by laterite, widespread cover of transported regolith (wind‐blown and water‐ borne sandy and silty clay), laterite scree and colluvium. Where remnant laterite profiles occur on low hills, there is ferricrete capping over a strongly weathered material that extends down to depths of 70 m. Ti‐V‐Fe mineralisation occurs as bands of cumulate aggregations of vanadiferous magnetite (martite)‐ilmenite (leucoxene) in massive and disseminated layers and lenses. Within the tenement the layered deposit has been divided into five sections established at major fault offsets. Cross faults have displacements that range from a few metres to 400 m. The water table occurs at about 35 m below the surface (when measured where the lateriteprofile has been stripped).
Drill hole Information	See Tables and Figures in bodyof announcement.
Data aggregation methods	For the metallurgical drilling within the Barrambie high grade deposit, all assays for the portion of the hole assayed to date (0 to 40m) have been aggregated. Assays for the remainder of the holes (40 to 71m) are pending. For resource extension drilling, intervals that satisfy 2m at 5% TiO2have been reported.
Relationship between mineralisation widths and intercept lengths	Resource extension holes have been drilled at an angle of 60 degrees from the horizontal toward grid west to achieve an approximate perpendicular intersection angle. Metallurgical holes were drilled entirely within the plane of the ore hence do not reflect true width of the orebody.
Diagrams	See body of announcement for Project geology, drill hole locations, schematicgeologyand drill cross sections.
Balanced reporting	All results have been reported.
Other substantive exploration data	See ASX announcement 6 December 2013 for further information regarding the Barrambie deposit. With respect to the recent exploration being reported here, no other data is considered material or meaningful for these.
Further work	No further exploration work is planned for the immediate future in the Barrambie area.

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