PAINCHEK LTD — Capital/Financing Update 2015

Apr 14, 2015

MinQuest receives $100,000 in funding from the South Australian government’s PACE Discovery Drilling 2015 Program

Highlights

15 April 2015

DIRECTORS

• MinQuest has received $100,000 from the South Australian Government Plan for Accelerating Exploration (PACE) Frontiers Initiative;

• MinQuest will use the $100,000 to partly fund the drill testing of the Cyclops Prospect, on the Coober Pedy Project, in central South Australia;

• The Cyclops Prospect contains an Iron Oxide Copper Gold (IOCG) target, which exhibits geophysical characteristics similar to the worldclass Prominent Hill copper-gold mine;

• The geophysical modelling suggests the target sits under 100m of cover, is at least 250m in vertical depth and potentially over 1500m along strike.

• MinQuest has scheduled drilling to commence at the Cyclops Prospect during the first week of May 2015 and drilling should take approximately 4-6 weeks to complete;

• All required approvals have been obtained to allow the commencement of drill testing at the Cyclops Prospect.

David Deloub Chairman Jeremy Read Managing Director Paul Niardone Non-Executive Director Adam Davey Non-Executive Director Kim Clark Company Secretary

SHARE INFORMATION

ASX Code: MNQ Issued Capital: 83,458,341 Fully Paid Shares 14,923,097 Unlisted Options

CONTACT INFORMATION Registered Office: 96 Stephens Road South Brisbane, QLD 4101 T: +61 7 3844 0372 F: +61 7 3844 0154 www.minquest.com.au

MinQuest Limited ACN: 146 035 127

INTRODUCTION

MinQuest Limited (“MinQuest” or “The Company” ) (ASX:MNQ) is pleased to announce that it has received $100,000 in funding from the South Australian Government through the Plan for Accelerating Exploration (PACE) Frontiers Initiative. This funding will assist in the completion of a 1,200m drill program planned to test an Iron Oxide Copper Gold ( IOCG ) target at the Cyclops Prospect, located south-west of Coober Pedy, South Australia ( Figure 1 ).

MinQuest’s Managing Director Mr Jeremy Read said, “Securing the funding under the PACE initiative is a very positive development for MinQuest and it demonstrates that the target at the Cyclops Prospect is of the highest quality.”

“The Cyclops Prospect contains magnetic and gravity geophysical anomalies that are similar in size, intensity and structural setting to the geophysical anomalies associated with the world-class copper-gold deposit at Prominent Hill.”

“What sets the target at Cyclops apart, from many other IOCG targets on the Gawler Craton in South Australia, is the fact that there is a gold geochemical anomaly associated with the geophysical feature and the depth-to-top of the source of the geophysical feature is modelled to only be approximately 100m.”

“The commencement of drilling at Cyclops in early May will mark the beginning of an intense period of work for MinQuest, as we are also preparing to drill both our Fyre Lake and Marg Projects in Canada over the northern hemisphere summer, in addition to the Cyclops drilling”, said Mr Read.

COOBER PEDY PROJECT (SOUTH AUSTRALIA)

The Coober Pedy Project is currently 100% owned by Teck Australia Pty Ltd ( Teck ) and comprises three exploration licenses, located at the north-western end of the highly endowed Proterozoic Olympic Dam IOCG Province on the Gawler Craton, South Australia ( Figure 1 ). Under the terms of a joint venture agreement with Teck, MinQuest has the ability to earn up to a 100% interest in the Coober Pedy Project, subject to a 2% Net Smelter Return Royalty to be retained by Teck.

Previous work by Teck defined a strong, discrete magnetic and gravity anomaly, the “Cyclops Prospect”, to the west of Coober Pedy. The Cyclops Prospect contains an untested ‘walk-up’ Prominent Hill Type IOCG drill target in close proximity to the Karari Shear Zone. The gravity and magnetic data have been forward modelled and indicate the potential source is a magnetite-rich body of approximately 800m x 250m, starting at a depth of approximately 100m ( Figure 2 ). Soil geochemical surveys detected a gold geochemical anomaly, coincident with the geophysical feature, on one of two lines of soil samples collected at Cyclops.

Planning and permitting for a 1,200m drill program to test the magnetic and gravity anomalies at Cyclops, have now been completed. It is anticipated that the drill

program will commence at Cyclops during the first week of May, 2015. The Cyclops drill program will take approximately four to six weeks to complete and MinQuest will update the market on any significant outcomes from the drill program during May and early June, 2015.

CYCLOPS PROSPECT GEOPHYSICAL INTERPRETATION

The Cyclops Prospect contains magnetic and gravity anomalies, believed to be similar to the magnetic and gravity anomalies associated with the Prominent Hill copper-gold deposit. At Cyclops the geophysical signature is that of a magnetic anomaly offset from a large gravity anomaly, occurring adjacent to a major craton bounding major structure; the Karari Shear Zone. ENE and NW-NNW structures, known to be important in controlling IOCG mineralisation on the Gawler Craton in South Australia, are also evident in the magnetic data.

It is interpreted that the source of the geophysical anomalies at Cyclops could be IOCG mineralisation emplaced at the time of the Hiltaba Event (~1595-1575 Ma), this event is known to be associated with IOCG mineralisation on the Gawler Craton.

At the Cyclops Prospect the gravity anomaly is caused by a large dense body, slightly off-set to the north from an intense magnetic anomaly, with both the magnetic and dense bodies dipping towards 330°. At the Prominent Hill deposit, the copper-gold mineralisation is hosted within a hematite breccia complex, which produces a large gravity anomaly. An associated magnetite skarn is unmineralised and separated from the main body of copper-gold mineralisation by a fault contact. Consequently, the gravity and magnetic anomalies are slightly offset, with the magnetic anomaly being north of the gravity anomaly. At the Cyclops prospect the magnetic and gravity anomalies are also slightly offset, although in the opposite direction, with the magnetic anomaly south of the gravity anomaly.

The main target at Cyclops is the source of the gravity anomaly, as it may be a Prominent Hill style hematite breccia complex. However, in IOCG’s magnetite can play an important role in the deposition of copper mineralisation. Consequently the source of the magnetic anomaly will also be properly drill tested.

Modelling of the geophysical data suggests the source of the gravity and magnetic anomalies appear to begin approximately 100m below the surface, which is the suspected depth of cover over the Proterozoic basement sequences in the area.

The initial drill testing of the geophysical anomalies at Cyclops will involve drilling two drill holes on the same section to thoroughly test the source of the magnetic and gravity features. Depending upon the results from the first two holes a third hole maybe drilled. The total drilling currently anticipated to be completed is 1,200m.

TERMS OF MINQUEST-TECK JOINT VENTURE

MinQuest can earn a 100% interest (subject to a 2% Net Smelter Royalty retained by Teck) in the Coober Pedy tenements currently owned by Teck.

A minimum of $500,000 is required to be spent on the Coober Pedy Project by 1 August, 2015, which must include at least 1,200m of drilling with at least 200m of diamond core drilling per hole. After meeting the minimum expenditure MinQuest can elect to either terminate the Joint Venture Agreement or proceed to acquire a 100% interest in the Coober Pedy Project by incurring $3,500,000 in exploration expenditure by 31 July, 2018.

Teck will maintain a right to earn back a 65% interest in the project (the "Back-in Right") which right will expire 60 days after MinQuest notifies Teck it has spent $7.5 million on the project.

If Teck elects to exercise its Back-in Right, it can earn back to a 65% interest by either;

• a) Making a cash payment of $10,000,000 to MinQuest within 60 days of exercise of its Back -in Right or;

• b) sole funding the next $20,000,000 of expenditures within the period of time equivalent measured from the date of the Agreement to the date of exercise of the Back-in Right.

A joint venture between Teck and MinQuest will automatically be formed on the date Teck earns back the 65% interest, at which point the 2% Net Smelter Royalty will be extinguished. From the formation of the Joint venture each party will be liable for its pro-rata share of costs and liabilities.

Competent Person Statement - Mineral Resource

The information in this ASX Announcement relating to the Mineral Resource estimate for the Kona Deposit is extracted from the ASX Release entitled “Merah Resources to Acquire Copper Project in the Yukon, Canada” announced on 18 July 2014 and is available to view on the ASX website (ASX:MNQ), and the Company's website. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, that all material assumptions and technical parameters underpinning the resource estimates in the relevant market announcement 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 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 laws.

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350000 400000 450000 500000 550000
6850000 SOUTH 6850000
AUSTRALIA Oodnadatta
Coober Pedy
30°S Cyclops
Prospect
Ceduna Port Augusta
EL 4542 Port Lincoln ADELAIDE
"Mount Clarence"
500 km
LOCALITY MAP
130°E 140°E
6800000 6800000
"Mabel Creek"
COOBER PEDYCOOBER PEDY
CYCLOPS PROSPECT
EL 4892 Cairn Hill
6750000 6750000
EL 4891
Lake Phillipson
"Ingomar"
Manxman Prominent Hill
6700000 6700000
"Commonwealth Hill"
350000 400000 450000 500000 550000
Exploration Licence (Teck Australia) Railway CYCLOPS PROSPECT - COOBER PEDY PROJECT
IOCG deposit Highway
Town Secondary road 0 10 20 30 40 50 km LOCATION MAP
Homestead Minor road
Track UTM Projection. MGA Zone 53. GDA94 Datum. Checked: C. DoornbosDrawn: RRM Drawing No.: FL-001.mxdDate: 09.10.2014 Revision: Figure 1
DARWINDARWIN
STUARTSTUART
ADELAIDEADELAIDE
HIGHWAYHIGHWAY
Dog Fence
RAILWAY
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Proposed Drill Hole
Proposed Drill Hole
Magnetic Anomaly
2.5D Modelled Density
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Colour spectrum = Magnetic Anomaly Blue contour lines = Density Anomaly

COOBER PEDY PROJECT GEOPHYSICAL CROSS-SECTION Drawn: RRM Date: 15.04.2015 Revision: Checked: C. Doornbos Drawing No.: CP-001.CDR

Figure 2