POLARX LIMITED — Interim / Quarterly Report 2017

Jan 31, 2018

31 January 2018

quarterly

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DECEMBER 2017 QUARTERLY ACTIVITIES REPORT

HIGHLIGHTS

• Assays from first seven holes at Zackly confirmed thick zones of mineralisation from surface.

• Results to date include:

	33.43m @	1.2% Cuand	1.3g/t Au	from	98.27m	in ZM-17002
incl.	14.78m @	1.2% Cuand	2.1g/t Au	from	112.63m
	18.44m @	1.3% Cuand	1.2g/t Au	from	169.50m	in ZM-17010
	9.85m @	1.9% Cuand	2.0g/t Au	from	85.70m	in ZM-17008
	5.85m @	1.2% Cuand	2.2g/t Au	from	88.80m	in ZM-17015
	5.25m @	2.0% Cuand	2.7g/t Au	from	9.70m	in ZM-17006

• Visible coarse gold and native copper was observed in some drill core samples. A selection of mineralised core samples are therefore currently being analysed using metallic-screen assay techniques to better measure gold and copper contents. Final assay grades, expected shortly, may therefore be higher than those reported to date.

• Strong geological evidence for an underlying porphyry intrusive which provided the heat, fluids and copper/gold from below Zackly has been observed in a number of holes.

• Zackly remains open along-strike and at depth.

• PolarX’s drill intersections are often wider than those recorded in the 1980’s, mainly due to better core recovery from the recent drilling.

• These results, and those for the remaining holes (to be announced shortly), will be included in an updated geological model and a JORC resource estimate in the current quarter.

• Evaluation of the IP anomaly, surface geochemistry and geological mapping continues to support a co-incident mineralised porphyry Cu-Au target at the Mars prospect.

• An additional 34 state mining claims have been staked to cover extensions to the Senator, Zackly and Mars prospects, plus a new prospect at Lyken.

WORK NEXT QUARTER Q1;(2018)

• Finalise and publish assays for outstanding Zackly drill holes

• Complete resource modelling for Zackly and publish JORC 2012 inferred resource

• Appoint drill contractor for 2018 field season

• Modelling and interpretation of IP data for Zackly, Mars and Senator

• Detailed planning and budgeting for 2018 exploration program for the Alaska Range Project

PolarX Limited | +61 8 6465 5500 | +61 8 6465 5599 | www.polarx.com.au Suite 1, 245 Churchill Avenue, Subiaco, Western Australia 6008

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EXPLORATION PROGRAMS

OVERVIEW

PolarX is focussed on the exploration and development of its Alaska Range Project which contains the Caribou Dome and Stellar Properties. Collectively these form a contiguous package with ~35km strike length containing extensive copper- and gold-in-soil anomalism along the entire length (see Figure 1) .

With a JORC Resource at Caribou Dome, and a historical, non-JORC Resource at Zackly, they form a high-grade copper and copper-gold portfolio with demonstrated endowment and clear upside potential for resource extensions and significantly larger porphyry copper-gold discoveries.

NEW CLAIMS STAKED

During the quarter, three blocks of new state mining claims (32 x 160 acres) were staked as depicted in Figure 1. These blocks cover extensions of the copper in soil anomalism at Senator and along both ends of the MarsZackly corridor. Two claims were also staked to cover a vegetation anomaly at Lyken, some 50km east of the Alaska Range Project. This type of vegetation anomaly is often associated with copper sulphide mineralisation in the bedrock.

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Figure 1. Location map showing main deposits and prospects at the Stellar and Caribou Dome projects in central Alaska and showing regional copper geochemistry in soil sampling draped on digital elevation.

PolarX Limited | +61 8 6465 5500 | +61 8 6465 5599 | www.polarx.com.au Suite 1, 245 Churchill Avenue, Subiaco, Western Australia 6008

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ZACKLY CU-AU SKARN

A program of thirteen diamond drill holes was completed at Zackly in the previous quarter. Preliminary assay results were received for seven of the thirteen holes (see Figure 2) .

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Figure 2. Zackly Prospect showing key assay results received to date.

Key assay re sults received to date are:

_e_sults received to date are:	_e_sults received to date are:
Hole_ID From (m) To (m) Interval (m)* Cu % Au g/t Ag g/t
ZM-17002	98.27 131.7 33.43 1.16 1.27 11.4
incl.	99.06 102.51 3.45 3.85 2.23 46.5
and	112.63 127.41 14.78 1.23 2.08 12.4
ZW-17004	131.87 136.55 4.68 0.92 1.52 10.9
ZM-17005	193.24 206.87 13.63 0.68 1.07 7.0
and	227.38 230.14 2.76 2.57 0.50 23.8
ZM-17006	9.7 14.95 5.25 2.00 2.71 26.1
ZM-17008**	85.70 95.55 9.85 1.95 2.00 20.1
ZM-17010	155.85 161.39 5.54 0.65 1.11 5.8
and	169.47 187.91 18.44 1.34 1.15 12.4
ZM-17015	88.80 94.65 5.85 1.23 2.20 12.3

* Thickness of mineralisation reported is down-hole thickness. There is insufficient interpretation of the mineralisation to confidently report “true widths”. It is however noted that the mineralized lenses appear to be relatively steeply dipping. As such it is probable that “true widths” may be smaller than the down-hole widths by approximately 50% (depends on hole dip).

** Hole ZM-17008 assay results were previously reported as hole ZM-17007 due to a laboratory sample number error which has since been rectified.

PolarX Limited | +61 8 6465 5500 | +61 8 6465 5599 | www.polarx.com.au Suite 1, 245 Churchill Avenue, Subiaco, Western Australia 6008

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PORPHRY POTENTIAL EVIDENT UNDER ZACKLY

Key observations from this program to date include:

• Mineralisation occurred in two distinct phases:

• An initial mineralising event occurred when a diorite intrusion formed marbles and weakly mineralised skarns in the adjacent silty-limestones and volcanic rocks, and introduced disseminated Fe, Cu and Mo sulphides.

• A stronger mineralisating event in which widespread garnetiferous skarns containing clots, veins and disseminations of bornite, covellite, magnetite, chalcopyrite and native copper overprinted the earlier mineralisation (see Figures 3 and 4).

• The drilling results to date highlight that the best mineralisation in the skarn generally occurs in the stratigraphicaly upper part of the skarn body near the faulted contact with the limestone, indicating stratigraphic and structural control to the mineralisation (see Figure 4) .

• The presence of porphyry style veins overprinting potassic alteration containing K-feldspar and secondary biotite and sub-vertical hydrothermal breccias provide strong evidence for the possible presence of a buried porphyritic intrusion (see Figure 5) .

• Final assay results for the remaining holes are expected in Q1;2018. Assay results and geological interpretations are being used to re-model the deposit and calculate a JORC resource estimate which the company expects to also publish in Q1;2018.

• Mineralisation remains open along strike and at depth.

• PolarX’s drilled intersections are in a number of cases wider than those recorded in the early 1980’s

Further drilling is being planned to establish the potential scale and commercial extent of this mineralised system at Zackly, and to assess its deeper porphyry potential.

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Figure 3. Bornite mineralisation in garnetiferous skarn, ZM17010, 179.4m down-hole depth.

PolarX Limited | +61 8 6465 5500 | +61 8 6465 5599 | www.polarx.com.au Suite 1, 245 Churchill Avenue, Subiaco, Western Australia 6008

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Figure 4 . Schematic drill cross-section along line 514,680mE showing assay results from PolarX drilling and historical drill holes. Note that mineralisation is preferentially located along the skarn-limestone contact.

PolarX Limited | +61 8 6465 5500 | +61 8 6465 5599 | www.polarx.com.au Suite 1, 245 Churchill Avenue, Subiaco, Western Australia 6008

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Figure 5. Schematic geological cross-section showing postulated early skarn overprinted by later stage porphyry derived fluids sourced from below.

PolarX Limited | +61 8 6465 5500 | +61 8 6465 5599 | www.polarx.com.au Suite 1, 245 Churchill Avenue, Subiaco, Western Australia 6008

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MARS PORPHYRY CU-AU TARGET

Mars is characterised by co-incident copper, gold, molybdenum and silver anomalism in broadly spaced soil samples over a large area of approximately 2,000m x 1,500m. Up to 7.4% Cu and 1.8g/t Au is evident in rockchip samples.

PolarX conducted an initial IP survey over the Mars prospect in late August 2017. The IP results (Figure 6) show an unconstrained buried chargeability anomaly located 100-150m below the surface geochemical anomalism. This overlay of geochemical and geophysical anomalies is consistent with a buried, mineralised porphyry CuAu system.

The full extent of the chargeability anomaly is not yet known– further surveying will be undertaken to map out the full extent of the IP anomaly in the 2018 field program prior to drill testing.

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Figure 6. Mars Prospect showing IP chargeability anomaly directly below soil geochemistry results and rock-chip sampling copper assays.

PolarX Limited | +61 8 6465 5500 | +61 8 6465 5599 | www.polarx.com.au Suite 1, 245 Churchill Avenue, Subiaco, Western Australia 6008

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The Mars prospect lies 6km to the WNW of the Zackly Skarn. Geological evidence indicates a WNW structural corridor extending between Mars and Zackly (Figure 7) . This potentially hosts multiple buried porphyry CuAu systems.

This corridor will now be prioritised for further exploration during 2018, including additional IP surveys, gravity surveys and re-processing of aeromagnetic data leading to extensive drilling.

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Figure 7. WNW trending structural corridor between Mars and Zackly plotted on an image of aeromagnetic data draped on digital terrain.

SENATOR CU TARGET

The Senator copper prospect was discovered through a soil sampling program undertaken by the Company in 2016. This highlighted an area covering approximately 5km x 2.5km with elevated copper in soils (>100ppm Cu) and sporadic outcrop. Recent site visits have highlighted the potential of this area having identified intense iron alteration (jarosite and hematite) and the presence of copper oxides on fracture surfaces (see Figure 10 below).

Five lines of IP data were read across the Senator copper anomaly in August for a total of 6.35km using 50m electrode spacing. Final pseudo-sections and inverted data were delivered to the Company in mid-October and results will be reported once analysed and interpreted.

CARIBOU DOME DEPOSIT

A small program of metallurgical test-work on mineralised samples from the Caribou Dome deposit commenced in the last quarter. This program is testing mineralised material from Lens 6 of Caribou Dome (the largest mineralised lens) to determine if copper selectivity can be increased through the use of different collectors which are selective against pyrite along with trailing several pyrite and carbon depressants. This could further enhance good copper concentrate grades (as previously reported). Results are expected in the next quarter.

PolarX Limited | +61 8 6465 5500 | +61 8 6465 5599 | www.polarx.com.au Suite 1, 245 Churchill Avenue, Subiaco, Western Australia 6008

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Figure 8. View of some of the strong oxidized alteration at Senator which contains jarosite and copper oxides throughout a large surface area of 5km x 2.5km.

CORPORATE

Non-executive director Mr Michael Fowler retired from the board in December to focus on his other business activities.

Frazer Tabeart Managing Director

PolarX Limited | +61 8 6465 5500 | +61 8 6465 5599 | www.polarx.com.au Suite 1, 245 Churchill Avenue, Subiaco, Western Australia 6008

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QUALIFIED AND COMPETENT PERSONS STATEMENTS

The information in this announcement relating to Exploration Results and Mineral Resources for the Stellar Project is based on information compiled by Dr Frazer Tabeart (an employee of PolarX Limited) who is a member of The Australian Institute of Geoscientists. Dr Tabeart 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 under the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the ‘JORC Code’). Dr Tabeart consents to the inclusion of the data in the form and context in which it appears.

The information in this announcement that relates to Mineral Resources for the Caribou Dome Project is based on information compiled by Mr Peter Ball who is a Member of The Australasian Mining and Metallurgy. Mr Ball has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and the activity he is undertaking to qualify as a Competent Person as defined in the JORC Code. Mr Ball consents to the inclusion in the announcement of the matters based on the information in the form and context in which it appears.

*Foreign Historic Mineral Resource Estimate for the Zackly Main Skarn in the Stellar Project:

• Readers are referred to the company's initial market release dated 24 may 2017 which provides supporting information on these historical foreign resource estimates.

• The company confirms that the supporting information disclosed in the initial market announcement continue to apply and have not materially changed. Readers are cautioned that that this estimate is a "foreign estimate" under asx listing rule 5.12 and is not reported in accordance with the jorc code.

• A competent person has not yet undertaken sufficient work to classify the foreign estimate as mineral resources or ore reserves in accordance with the jorc code.

• It is uncertain that, following evaluation and/or further exploration work, it will be possible to report this foreign estimate as mineral resources or ore reserves in accordance with the jorc code.

FORWARD LOOKING STATEMENTS

Any forward-looking information contained in this report is made as of the date of this report. Except as required under applicable securities legislation, PolarX does not intend, and does not assume any obligation, to update this forward-looking information.

Any forward-looking information contained in this report is based on numerous assumptions and is subject to all of the risks and uncertainties inherent in the Company’s business, including risks inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward-looking information. Readers are cautioned not to place undue reliance on forward-looking information due to the inherent uncertainty thereof.

PolarX Limited | +61 8 6465 5500 | +61 8 6465 5599 | www.polarx.com.au Suite 1, 245 Churchill Avenue, Subiaco, Western Australia 6008

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LIST OF MINING CLAIMS

LIST OF MINING CLAIMS	LIST OF MINING CLAIMS
PROJECT LOCATION LICENCE(S) OWNERSHIP INTEREST
ALASKA RANGE PROJECT(i)
CARIBOU DOME CLAIMS	Alaska, USA Claim & ADL Caribou 1 – Caribou 20 ADL# 563243 - 563262 Copper 1 – Copper 6 ADL# 588461 – 588466 Copper 7 – Copper 11 ADL# 645375 – 645379 CD 1 – CD66 ADL# 664859 – 664924 CD 001 – 040 ADL# 719909 – 719948 CDS 001 – 038 ADL# 719949 – 719986 CDE-01 – 27 ADL# 722216 – 722242 Option to earn 80% Option to earn 80% Option to earn 80% Option to earn 80% Option to earn 90% Option to earn 80% Option to earn 90%
STELLAR CLAIMS	Alaska, USA SB 154 – 155 ADL# 704562 – 704563 SB 167 – 168 ADL# 704575 – 704576 ZK 3 – 5 ADL# 704621 – 704623 ZK 14 ADL# 704632 ZK 19 – 21 ADL# 704637 – 704639 Z 1 – 5 ADL# 709427 – 709431 Z 6 – 10 ADL# 711728 – 711732 SB 281 – 283 ADL# 714079 – 714081 SB 297 – 299 ADL# 714095 – 714097 SB 317 – 319 ADL# 714115 – 714117 SB 346 – 348 ADL# 714144 – 714146 SB 364 – 368 ADL# 714162 – 714166 SB 376 – 379 ADL# 714174 – 714177 SB 389 – 390 ADL# 714187 – 714188 SB 417 ADL# 715392 SBA 001 – 066 ADL# 721446 – 721511 SBX 001 – 070 ADL# 724789 – 724858 LYKN 1 – 2(ii) ADL# 725111 – 725112 CD 41 – 51(ii) ADL#725113 - 725123 SBX 71 – SBX 91(ii) ADL# 726910 – 726930 100%

PolarX Limited | +61 8 6465 5500 | +61 8 6465 5599 | www.polarx.com.au Suite 1, 245 Churchill Avenue, Subiaco, Western Australia 6008

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• (i) No Alaska Range Project claims were relinquished or disposed of during the period.

• (ii) The Stellar Claims acquired during the period pursuant to new applications were numbered SBX 71 – SBX 91 (ADL#726910 - 726930), LYKN 1 – 2 (ADL#725111 - 725112) and CD 41 - 51 (ADL#725113 – 725123).

PROJECT LOCATION LICENCE(S) OWNERSHIP INTEREST	PROJECT LOCATION LICENCE(S) OWNERSHIP INTEREST
UNCLE SAM GOLD PROJECT(iii)	Alaska, USA Claim& ADL # Nil(iv) Refer below(v)

• (iii) Subject to a mineral lease and Purchase Agreement with Great American Minerals Exploration Inc. (Game), pursuant to which game will lease the Uncle Sam gold project for up to 10 years with an option to purchase outright at any time during the lease period on the terms and conditions detailed in the ASX announcement of 30 July 2015 (Option Agreement).

• (iv) During the period the Company received noticed from the Department of Natural Resources (State of Alaska) that the mineral claims which comprise the Uncle Sam gold project had been declared abandoned (DNR Notice). The basis for the decision was an error on the affidavit of labor filed by the previous tenement owner in 2011. Further, as a result Game has sought to terminate the Option Agreement.

The Company is currently reviewing its options in relation to this matter, including whether Game has complied with its obligations under the option agreement, but notes that the Uncle Sam gold project:

• is considered a non-core asset and has a $nil carrying value in the Company’s financial statements; and

• is independent of the Company’s Alaska Range Project.

• (v) For a detailed listing of the Uncle Sam gold project mineral claims, held prior to receipt of the DNR Notice, refer Appendix 1 to the Quarterly Activities Report dated 31 October 2017.

PolarX Limited | +61 8 6465 5500 | +61 8 6465 5599 | www.polarx.com.au Suite 1, 245 Churchill Avenue, Subiaco, Western Australia 6008

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