PAINCHEK LTD — Capital/Financing Update 2015

Sep 23, 2015

Update on the proposal to acquire Wolverine Zinc Project

Highlights

• The Supreme Court of British Columbia has adjourned MinQuest’s application for the Monitor to be authorised to execute, on behalf of Yukon Zinc, the Asset Purchase Agreement pursuant to which MinQuest would acquire the Wolverine Zinc Mine and related assets in the Yukon Territory

• MinQuest will be at liberty to apply to the Court for a further hearing of its application if the Yukon Zinc Restructuring Plan is not implemented.

• The terms of the Yukon Zinc Restructuring Plan provide that Yukon Zinc will make payment to Affected Creditors by 2 October 2015.

• If the Yukon Zinc Restructuring Plan is not implemented, the APA will be conditional upon MinQuest securing the financing to complete the asset purchase within sixty days and court approval. MinQuest is in discussions with a number of potential financiers who have expressed interest in financing the acquisition of the Wolverine zinc mine.

• If MinQuest purchases the Wolverine Zinc Mine and related assets, MinQuest intends to finalise its assessment of the ability to put the Wolverine Mine back into operation as soon as is economically feasible. Following completion of any mining at Wolverine, MinQuest will use the Wolverine processing plant to process ore from the nearby Fyre Lake project, creating significant jobs and business opportunities for the region, over potentially a 10 year period.

24 September 2015

DIRECTORS

David Deloub Chairman

Jeremy Read Managing Director

Paul Niardone Non-Executive Director

Adam Davey Non-Executive Director

Stephen Kelly Company Secretary

SHARE INFORMATION

ASX Code: MNQ Issued Capital: 202,064,511 Fully Paid Shares

72,936,522 Unlisted Options

CONTACT INFORMATION Registered Office: Unit 1, 47 Park Road Milton, QLD 4064 T: +61 7 3511 6570 F: +61 7 3369 3305 www.minquest.com.au

MinQuest Limited ACN: 146 035 127

On 4 September 2015 MinQuest Limited (ASX:MNQ) announced that it had agreed with PwC (“the Monitor”) the terms of an Asset Purchase Agreement (APA) for the acquisition by MinQuest of the Wolverine zinc mine. The Wolverine zinc mine is owned by Yukon Zinc Corporation (“Yukon Zinc”) that has been granted protection from its creditors pursuant to the Companies Creditors Arrangements Act (“CCAA”). PwC has been appointed as Monitor of Yukon Zinc in the CCAA Proceedings.

On 23 September 2015 (Pacific Time), the Supreme Court of British Columbia heard an application by MinQuest for an order that the Monitor be authorised to execute the APA on behalf of Yukon Zinc. The Court has adjourned MinQuest’s application pending the outcome of the Yukon Zinc Restructuring Plan.

If Yukon Zinc's restructuring plan is not implemented, MinQuest will be at liberty to apply to the Court for a further hearing of its application for the APA to be executed by the Monitor. The terms of the Yukon Zinc Restructuring Plan provide that Yukon Zinc will make payment to Affected Creditors by 2 October 2015, or such later date as agreed to with the Monitor.

The APA includes the acquisition of the Wolverine Mine comprising the 750,000 tpa processing facility, tailings management facility, mine office, workshops, power station, underground mine, surrounding exploration tenements and operating licences. The consideration to be paid by MinQuest pursuant to the APA is CAD$15 million, with an additional payment of CAD$2.85 million to the government of the Yukon Territory to supplement an existing CAD$7.7 million of environmental bonds. In addition to proceeding with the purchase of Wolverine pursuant to the APA, MinQuest is proposing to make payments to employees and unsecured creditors totalling approximately CAD$4M after the completion of the purchase under the APA.

If Yukon Zinc’s restructuring plan is not implemented, the APA will be conditional upon MinQuest securing the financing to complete the asset purchase within sixty days and court approval. MinQuest is in discussions with a number of potential financiers who have expressed interest in financing the acquisition of the Wolverine zinc mine.

The Wolverine project is 28km north east of MinQuest’s Fyre Lake Project in the Finlayson Lake District of the south east Yukon Territory.

MinQuest is assessing the potential to use the existing facilities at Wolverine to process ore from Fyre Lake. MinQuest also is considering resuming mining and processing of the remaining reserves at Wolverine while infrastructure is developed and permits obtained to transport ore from Fyre Lake to Wolverine.

MinQuest’s opinion is that for viable, long term mining operations to be sustained using the existing infrastructure at Wolverine, an integrated project combining the remaining mineral resources at Wolverine and the Kona mineral resource on the adjacent Fyre Lake project, is required.

Competent Person Statement

The information in this report that relates to exploration results is based upon information reviewed by Mr Jeremy Read BSc (Hons) who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Read is a full time employee of MinQuest Limited and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is 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”. Mr Read consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Mr Read is the Managing Director of MinQuest and currently owns 2,525,253 Fully Paid Ordinary Shares and has the entitlement to a further 2,525,253 deferred consideration shares subject to relevant milestone events being achieved.

Forward Looking Statements

This announcement contains “forward-looking statements”. Such forward-looking statements include, without limitation: estimates of future earnings, the sensitivity of earnings to commodity prices and foreign exchange rate movements; estimates of future production and sales; estimates of future cash flows, the sensitivity of cash flows to commodity prices and foreign exchange rate movements; statements regarding future debt repayments; estimates of future capital expenditures; estimates of resources and statements regarding future exploration results; and where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, forward looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such risks include, but are not limited to commodity price volatility, currency fluctuations, increased production costs and variances in resource or reserve rates from those assumed in the company’s plans, as well as political and operational risks in the countries and states in which we operate or sell product to, and governmental regulation and judicial outcomes. For a more detailed discussion of such risks and other factors, see the Company’s Annual Reports, as well as the Company’s other filings. The Company does not undertake any obligation to release publicly any revisions to any “forward looking statement” to reflect events or circumstances after the date of this release, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities law.