Nova Minerals Ltd — Interim / Quarterly Report 2016

Oct 27, 2016

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Quantum Resources Limited ABN 84 006 690 348

Level 17, 500 Collins Street Melbourne, Victoria 3000, Australia T +61 3 9614 0600 | F + 61 3 9614 0550

Quarterly Activities Report – September 2016

QUARTERLY HIGHLIGHTS

• Quantum Resources completes acquisition of rights to earn an interest in up to 95% of the Thomson Brothers Lithium Project in Manitoba, Canada – ranked as one of the top mining jurisdictions in the World.

• Exploration commences on Lithium Project with encouraging results

THOMPSON BROS. LITHIUM PROJECT – MANITOBA, CANADA

During the quarter, the Company completed the acquisition of Manitoba Minerals Pty Ltd (“ MMPL ”), a private company that holds rights to earn up to a 95% ownership interest in the Thompson Brothers Lithium Property in Wekusko Lake, Manitoba, Canada.

MMPL is a private company which holds the rights to earn up to a 95% ownership interest in the Thompson Bros. Lithium Property in Wekusko Lake, Manitoba (the “ Project ”) from Ashburton Ventures Inc. (“ ABR ”), by financing ABR’s commitments under an Option Agreement with the current holder of the Project, Strider Resources Ltd (“ SRL ”).

About the Thompson Bros. Lithium Project and Exploration Update

The Thompson Bros. Lithium Project is located 20 kilometres east of the mining community of Snow Lake, Manitoba. The main highway between Thompson and Flin Flon and rail connecting Winnipeg and the seaport of Churchill both pass 40 km south of the property.

The project consists of 18 contiguous claims covering 1829 hectares. Manitoba is consistently ranked one of the top mining jurisdictions in the world and electricity costs are amongst the lowest in North America.

As advised on 27 October 2016 ( ASX: QUR – Exploration Update – Thompson Bros Lithium Project ), exploration re-commenced on the Project.

Mapping of lithium bearing outcrops as well as surface sampling of spodumene bearing pegmatites was undertaken at Thompson Bros. The purpose of the sample collection was to prove lithium content in rock samples analysed with modern technology in relation to broader results from historic work.

Results from Reconnaissance Exploration

The collection of representative rock chip samples collected during the visit has identified and confirmed the main Thompson Bros lithium-rich spodumene bearing pegmatite dyke.

The Company received assays for the two samples taken from Thomson Bros with highly encouraging results. Analyses for these samples are presented as percentages of Li2O in Table 1. Results of the chip samples compare favourably with the range of historic values reported in Manitoba government assessment files and historical technical reports.

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Quantum Resources Limited ABN 84 006 690 348

Exploration Results

Sample #	Li (ppm)	Li (ppm)	Li2O%
1139251	9240	0.92%	1.99%
1139252	5540	0.55%	1.19%

TABLE 1 . Rock Chip Sample Results from Confirmation Sampling Program

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Figure 2 : Spodumene Mineralisation at Thompson Bros Project

Thompson #5 Outcrop and Sherrit-Gordon Zone Could Lead to Significantly Larger Overall Tonnages

Interpretation of the historical data has demonstrated the existence of other nearby lithium bearing structures on the Property which could significantly increase overall tonnages. These zones are in addition to the main Thompson Zone which remains open at depth and along strike.

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Quantum Resources Limited

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ABN 84 006 690 348
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Sample
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Figure 2 : Additional Zones and occurrences within the project area with the Main Pegmatite Deposit Open at depth and along strike.

Thompson #5 Outcrop

The Thompson #5 Outcrop is located approximately 300 metres north of the main pegmatite deposit and is interpreted to represent a potential new, parallel zone that is yet to be drill tested. In 1989, a representative sample from the area tested 2.93% Li2O. (Historical Non-JORC Compliant). (Source: Lake Field Research - Falconbridge Limited: Document 93474 Re: Spodumene Sample MLR099)

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Quantum Resources Limited ABN 84 006 690 348

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Sherrit-Gordon Zone

The Sherrit-Gordon Zone hosts a number of pegmatite dykes with intruded parallel structures that were subsequently deformed and locally displaced. Analysis of spodumene by the Provincial Assayer of Manitoba returned 6.80% Li2O. (Historical, Non-JORC Compliant). ( Source: Manitoba Minerals Deposit Database: Deposit Number M63J / 13-109).

The previous estimates from the Thompsons #5 Outcrop and the Sherrit-Gordon Zone (above) are historical estimates and are not reported in accordance with the JORC Code. A competent person has not done sufficient work to classify the historical estimates as mineral resources and/or reserves in accordance with the JORC Code. It is uncertain that following evaluation and/or further exploration work that the historical estimates will be able to be reported as mineral resources or ore reserves in accordance with the JORC Code .

Engagement of Technical Team

During the quarter, the Company appointed Dahrouge Geological Services (“Dahrouge”) to oversee the future drilling campaign at Thompson Bros. Dahrouge is a mineral exploration, consulting, and project management group based in Edmonton, Alberta.

The team at Dahrouge has direct experience in providing services in the lithium sector, having worked on the development of lithium resources across a number of projects in the United States and Canada.

Future Plans

The Company intends to undertake a drilling program to confirm the historical, non-JORC compliant resource previously calculated on the Property. It is proposed to undertake this program early in the new year, over the Canadian winter, where conditions and access are highly advantageous for these type of operations as winter roads can be opened across the frozen lakes.

The program is envisaged to comprise sixteen diamond drill holes along the approximately 800m strike of known mineralisation for a total of 3,200m of drilling. The Company is targeting a number of drill holes which will test the extent of the mineralization of the previously intersected zones and test the down dip extension at Thompson Bros. It is anticipated that this drilling will allow an initial JORC compliant inferred resource to be calculated for the Project.

TELFER PROJECT

(Quantum 100%)

The Company’s Telfer Project comprises a single exploration licence in a tightly held area 6km from the Telfer Gold Mine within the world class Paterson Province in Western Australia, which is host to significant deposits of various styles of mineralisation including the Telfer Mine, O’Callaghans tungsten and base metals skarn deposit, the Kintyre uranium deposit and the Nifty copper deposit. The Telfer deposit is one of Australia's largest deposits with a reported Ore Reserve of 6.3 million ounces of gold and 0.295 million tonnes of copper within a Mineral Resource of approximately 15 million ounces of gold (December 2013). The O’Callaghan’s ore body, 10km south east of Telfer mine, is also owned by Newcrest and hosts significant resources of tungsten, copper, lead and zinc.

Reprocessing and interpretation of historic airborne electromagnetic and magnetic data by an external consultant identified the extension of a dome structure, which hosts the 17 Mile hill deposit, into the

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Quantum Resources Limited ABN 84 006 690 348

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tenement area. The consultant identified a new target area associated with the structure and a potential granite intrusion satisfying a number of important exploration criteria in the Telfer region.

A limited amount of wide-spaced geochemical drilling has been undertaken in the target area (see Figure 3). The drill holes are relatively shallow and typically terminated at the base of the transported overburden. Geological logs reveal that anomalous gold values in some holes may be associated with lateritic residuum at the base of the transported overburden and have not been adequately followed up. This is encouraging and represents an opportunity for immediate investigation through either extending the grid or drilling closer spaced holes to test the fresh bedrock.

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Figure 2 – Telfer Project Location Plan

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Quantum Resources Limited
ABN 84 006 690 348
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Chicken Ranch Prospect
17 Mile Hill
Au ppb
> 50
20 to 50
10 to 20
0 to 10
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Figure 3 – Major Features over E45/2401. Background image is 1VD Bouger Gravity. GDA94.

Magnetic Target Areas

Further review of the drill hole geochemical assay data identified that maximum down-hole gold values are spatially associated with areas of subdued magnetic response such as Area 1 in Figure 3. The subdued magnetic response possibly represents destruction of magnetite due to hydrothermal alteration, which may be associated with mineralisation. Additional areas with a subdued magnetic response have been identified (eg Area 2 and Area 3), which have not been adequately drilled and are considered valid targets for reconnaissance geochemical drilling.

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Quantum Resources Limited

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ABN 84 006 690 348
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Au ppb
> 50
20 to 50
10 to 20
0 to 10
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Figure 4 – Historical Drilling over Reduced to Pole Magnetics. Areas of subdued magnetic response defined by pink polygons.

Electromagnetic Target Areas

Historic airborne electromagnetic data (Time Domain Electromagnetic Survey) was reprocessed to produce a number of images. Figure 4 shows the Channel 10 survey data, which highlights the stratigraphy folding around the interpreted dome structure.

Maximum down-hole gold values appear to be associated with the northern arm of a conductive zone within the Punta Punta Formation. The southern arm has not been drilled and is considered a valid target for reconnaissance geochemical drilling.

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Quantum Resources Limited
ABN 84 006 690 348
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Au ppb
> 50
20 to 50
10 to 20
0 to 10
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Figure 5 – Historical Drilling over Electromagnetics

Background image is Channel 10 TDEM Survey Data. GDA94.

Re-evaluation of Chicken Ranch Prospect

Gold mineralisation at the Chicken Ranch prospect (Figure 5) is associated with deeply oxidised sediments of the Punta Punta Formation and includes mineralised intercepts of up to 7m @ 13 grams per tonne including a maximum of 1m @ 52 grams per tonne. The potential for the Punta Punta Formation to host economic mineralisation is considered high as shown by the Fallows Field deposit southwest of Telfer Mine. The Fallows Field deposit is hosted by Punta Punta Formation and in the 1980’s Newcrest defined a mineral resource and mined approximately 50,000 ounces of gold.

Quantum considers a re-evaluation of the potential of the Chicken Ranch prospect to host economic mineralisation is warranted.

During the previous quarter, the Company was advised that a third party has sought application for forfeiture of the licence. This application for forfeiture has now been removed.

No field work was carried out during the quarter.

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Quantum Resources Limited ABN 84 006 690 348

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TANAMI (OFFICER HILLS JV) PROJECT

(Quantum 100%, Newmont Option to earn up to 70%)

The Officer Hill JV Project is located within the Tanami geological province, which hosts world class orogenic gold deposits including the Granites gold deposits and the operating Callie Gold Mine o wned by Newmont Mining (Figure 2). The Company holds a single Exploration Licence located 34 kilometres southwest of the Callie Gold Mine, which at the end of 2013 had 3.01 million ounces of gold reserves. The licence was granted on 29 July 2013 for a period of six years.

As advised during the previous quarter, the Company re-negotiated terms under the joint venture whereby Newmont are earning a 70% interest (previously 75% interest) by spending $500,000 within three years. Under the terms of the agreement Newmont must spend $100,000 within the first 12 months.

Newmont advised that no field work was completed during the quarter.

Quantum’s Tenement Holdings as at 30 September 2016:

PROJECT	TENEMENT NUMBER	COMPANY’S BENEFICIAL INTEREST	CURRENT AREA (KM2)	CURRENT HOLDER	COUNTRY/ STATE
Telfer	E45/2401	100%	70.84 KM2	Quantum	WA
Tanami (Officer Hill)	EL23150	100%*	206.08 KM2	Quantum	NT

*Quantum 100%, Newmont Option to earn up to 70% under farm out arrangement

In addition, MMPL, a 100% subsidiary of Quantum, holds rights to earn up to a 95% ownership interest in the Thompson Brothers Lithium Property in Wekusko Lake, Manitoba, Canada

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Quantum Resources Limited ABN 84 006 690 348

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CORPORATE UPDATES

CORPORATE

Funding

During the quarter, the Company, through its corporate advisor, finalised a loan funding totalling $400,000 (“ Loan Facility ”). The terms of the Loan Facility provide for repayment through the issue to the lenders of ordinary fully paid shares at an issue price of $0.02 per share together with one freeattaching option for each ordinary share issued (each option having an exercise price of $0.0325 (3.25 cents) and an expiry date of 17 November 2018).

Shareholders meeting

On 7 September 2016, the Company held a general meeting of shareholders. Shareholders approved all resolutions, including the repayment of the Loan Facility through an issue of shares and options. On 5 October 2016, the Company issued the 20 million and 20 million options to fully repay the Loan Facility.

In addition, the Company issued 100 million shares to the vendors of MMPL, being the consideration of the acquisition of MMPL. The Company also issued options to consultants and directors, as approved by shareholders.

Securities on issue as at 30 September 2016:

CLASS OF SECURITIES	NO. OF SECURITIES ON ISSUE
Total fully paid ordinary shares 309,139,826
Unlisted options exercisable at $0.0325 each on or before
17 November 2018 52,000,000
Unlisted options exercisable at $0.0325 each on or before
31 August 2020 17,000,000
Unlisted options exercisable at $0.02 each on or before
31 August 2019 7,500,000

Board as at the date of this Report

Mr Eliahu Bernstein Non-Executive Chairman Mr Ari Herszberg Non-Executive Director Mr Avi Kimelman CEO and Director Mr Adrien Wing Company Secretary

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Quantum Resources Limited ABN 84 006 690 348

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Competent Person

The geological information in this report that relates to Australian exploration results is based on information previously compiled by Dr DS Tyrwhitt who is a Fellow of the Australasian Institute of Mining and Metallurgy. Dr DS Tyrwhitt is a consulting geologist employed by DS Tyrwhitt & Associates Pty Ltd. Dr DS Tyrwhitt has 50 years’ experience in the industry and has more than 5 years’ experience which is relevant to the style of mineralisation being reported upon to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Dr Tyrwhitt has previously consented to the inclusion of the matters based on the information in the form and context to which it appears.

The geologic information in this report that relates to the Canadian exploration results Results is based on information compiled by Mr Olaf Frederickson. Mr Frederickson is a Member of The Australasian Institute of Mining and Metallurgy (AusIMM) and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking 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 (the “JORC Code”). Mr Frederickson is a consultant to Quantum Resources Limited. Mr Frederickson consents to the inclusion in the report of the Exploration Results in the form and context in which they appear.

Quantum Resources Limited September 2016 Quarterly Report

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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

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

Name of entity

Quantum Resources Ltd

ABN 84 006 690 348	Quarter ended (“current quarter”)
84 006 690 348	30 September 2016

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 (GST) 1.9 Net cash from / (used in) operating activities	(8) (229) 13	(8) (229) 13
	(224)	(224)
2. Cash flows from investing activities 2.1 Payments to acquire: (a) property, plant and equipment (b) tenements (see item 10) (c) investments (d) other non-current assets	(128)	(128)

• See chapter 19 for defined terms

1 September 2016

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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
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 (provide details if material) 2.6 Net cash from / (used in) investing activities
	(128)	(12)
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	400	400
	400	400
4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 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	71 (224) (128) 400	71 (224) (128) 400
	119	119

• See chapter 19 for defined terms 1 September 2016

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

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)	119	119
	119	119
6. Payments to directors of the entity and their associates Current quarter $A'000 6.1 Aggregate amount of payments to these parties included in item 1.2 48 6.2 Aggregate amount of cash flow from loans to these parties included in item 2.3 6.3 Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2
		Current quarter $A'000
		48
7. Payments to related entities of the entity and their associates Current quarter $A'000 7.1 Aggregate amount of payments to these parties included in 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
		Current quarter $A'000

• See chapter 19 for defined terms 1 September 2016

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

	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

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 (provide details if material) 9.7 Total estimated cash outflows	133 135
	277

The Company will rely on its existing cash resources and future capital raising (either debt and/or equity) to funds its current activities. The Company may utilise its ability to raise additional funds via its placement capacity under LR7.1 and LR7.1A

In light of the above factors, the Company believes that it will have sufficient cash to fund its existing activities. The Company expects to have negative cashflows from operations of approximately $277,000 for the forthcoming quarter. The Company’s Board and Management is focused on meeting its current objectives and confirm that it is in compliance with ASX Listing Rules, in particular, Listing Rule 3.1.

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

Refer to Activities Report for further details.

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

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.

Sign here: . ........... Date: ....28/10/16..................... (Director)

Print name: ...Avi Kimelman........................

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 1 September 2016

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