QEM LIMITED — AGM Information 2020

Nov 26, 2020

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QEM Limited Dual Commodity Opportunity

ASX: QEM AGM PRESENTATION November 2020

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Disclaimer

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Dual Commodity Champion

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Julia Creek Project
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Vanadium

QEM aims to become a leading supplier of high quality vanadium pentoxide to both the nascent energy storage sector and the international steel industry.

Right Project

Julia Creek in North Queensland allows production of both Vanadium (a Critical Mineral) and high quality transportation fuels

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Oil & Transport Fuels

QEM aims to provide innovative and environmentally friendly solutions that are important to our energy future. The Company seeks to assist with the current fuel security issue facing Australia, by producing liquid fuels for the domestic market.

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Corporate Overview

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QEM Limited (ASX:QEM) is developing the Julia Creek Vanadium and Oil Shale Project

Targeting Dual commodities of transport fuels and vanadium pentoxide

Vanadium defined as Critical Mineral by Australian and US Governments

Transport fuels to support Australian resilience in post COVID economy

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Globally significant JORC (2012) Indicated +Inferred Resource 2,760 Mt @ 0.30% V2O5

783MMBL’s of oil in the 3C category

Team that delivers

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Capital Structure

QEM Share Price in 2020

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$0.14
$0.12
$0.10
$0.08
$0.06
$0.04
$0.02
$0.00
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ASX Symbol: QEM Shares on Issue 100 million Market Cap (26 November 2020) $9.5m Share Price (26 November 2020) $0.095 Cash (as at 30 September 2020) $2.24m

Major Shareholders

Directors 49.48%

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Enterprise value of $7m
Provides significant
leverage to development
strategy success.
Director Support
2.4m shares purchased
by Directors on market
over last 12 months.
Alignment
Management alignment
with public shareholders.
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Right Project At the right time

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Significant Project Processing Route Studies Underway
Excellent location
Management that Delivers
In Demand Commodities
•
Vanadium Pentoxide for energy storage market
•
Transport fuels to enhance national resilience
Growth Focused
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Location Infrastructure

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Julia
Creek
Project
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Julia Creek Project Update

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Key Facts

• Dual commodity deposit – shallow oil bearing shale that is also mineralised with vanadium

• QEM confident will be able to extract both oil and vanadium, for dual revenue contribution to project economics

• Close to all infrastructure and services including road, rail, water, telecommunications and fibre optic cable

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Significant Resource Upgrade

• October 2019 Resource Upgrade of total JORC Inferred resource by 62% to 2,760 million tonnes

• JORC Indicated area of 220Mt

• Average content V2O5 @ 0.30%

• Oil component- 783MM Barrels 3C Contingency with up to 88l/t

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Method

• Deposit is shallow with favorable strip ratios as low as 2:1

• Given the resources are near surface – QEM intends to pursue development of a standard open cut method.

• Detailed process studies and bench scale testing currently underway for extraction of both hydrocarbons and vanadium.

• Extraction methods being investigated are safe, sustainable and environmentally friendly.

• Above ground processing envisioned at Julia Creek.

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Latest Developments Test Work

• On 21 July QEM announced results from extraction test work, utilising hydrogen donor solvent to aid extraction of kerogen from oil shales

• Test results from the Julia Creek resource confirm oil yields up to 181 kg per tonne , which is 218% on those reported under Modified Fischer Assay (MFA)

• Oil yields consistently over 175% of Modified Fischer Assay oil yield for a range of varying test conditions

• The increase in oil yields is made possible with the addition of a solvent, which would be derived directly from the oil stream produced from the Julia Creek resource and therefore be exceptionally cost effective

• Potential for raw oil be upgraded through on-site hydrogenation to produce transport fuels (diesel)

• On 11 August, QEM announced test work results for vanadium extraction rates within the shale portions of the Julia Creek resource. Initial results show 90% yield available through acid extraction.

Continuing test program with HRL Laboratories

• Complete optimisation test work for vanadium extraction, building on the knowledge from the work to date including;

• Optimisation of acid leach testing, for temperature and capacity

• Alkaline leaching tests underway

• Potential for cement by-product

• Economic assessment and engineering studies to follow

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The Team

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John Foley

Gavin Loyden

Daniel Harris

David Fitch

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Development Strategy

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Engineering Stage 2
design and cost PFS Commercial plant
modelling development
IP generation & protection
Completion of
bench scale Pilot plant Stage 1 Pilot plant
testing for both oil design and development
and vanadium costing
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Supportive Policy Environment

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Development of Northern Australia and Resource Corridors Government Priority

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Julia Creek Vanadium is a new energy mineral –strategic significance as a Critical Mineral

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Greater Fuel Resilience Needed

Federal Government Resource Corridors Julia Creek located in key corridor

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Vanadium Market

• The global vanadium market is expected to grow by 28.31 thousand tons during 2020-2024. (Source: Technavio Global Vanadium Market Report 2020-2024)

• Demand for vanadium is expected to grow steadily in the future as a result of updated construction policy guidelines, which adjusted with Chinese domestic rebar standards to promote higher product strength in 2018.

• The impact of COVID-19 has increased China’s stimulus spending on infrastructure, resulting in China being a net importer of vanadium for the first time since 2004.

• Chinese domestic market tightened due to increased consumption in steel

• Vanadium was added to the ‘US Strategic Metals List’ in 2018, illuminating the metals importance to that nations industry. (Source: ROBERT GOTTLIEBSEN: The Australian, March 5, 2018

• V2O5 price for 98% flake US$7.10/lb; Europe US$5.20/lb as of 25/11/2020

• Long term average price for commodity grade V2O5 is $8.86/lb USD (inflated to 2017 $USD)

• High grade V2O5 sold at a premium to commodity price

• Vanadium electrolyte for use in VRB in short supply worldwide

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Source: Vanitec http://vanitec.org/vanadium/productionconsumption

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Fuel Resilience

• Australia is an island nation that depends heavily on imported fuel — and our stockpile is critically low. The Government's Australian Petroleum Statistics published in April 2020 said this would amount to 30 days of petrol for automobiles, 20 days of diesel and 20 days of aviation fuel. (Courier Mail 5/07/2020)

• This is clearly in contravention of Australia's obligation as a member of the International Energy Agency (IEA) to hold at least 90 days of supply. Australia has not had 90 days supply since 2012.

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• A review of the transport energy policies of 75 countries globally reveals Australia is alone in its total reliance on “market forces” to ensure secure access to transport fuel — critical to the functioning of society and the economy. Australia is critically exposed to disruption in the supply of transport fuels and Australia’s combined dependency on crude and fuel imports for transport has grown from around 60% in 2000 to over 93% today.

• QEM considers this an opportunity. Advances in processing technologies of oil shale have been rapidly developing over the last few years and although the use of oil shale for energy goes back for generations, these advancements have now made processing oil from shale commercially viable and profitable.

• QEM is currently investigating a number of these environmentally friendly extraction technologies, with the aim of determining a potential method to produce liquid fuels from the Julia Creek resource, with the potential flexibility to also support hydrogen production.

Peer Comparisons

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C o m p a n y ASX C o de Pro ject Na m e Lo ca tio n To ta l Reso urce V205 % To ta l V205 Mt (Mea sured) V205 % (Measured) TotalV205 Mt (In dica ted) V205 % (Indicated) TotalV205 Mt (In ferred) V205 % (Inferred)	C o m p a n y ASX C o de Pro ject Na m e Lo ca tio n To ta l Reso urce V205 % To ta l V205 Mt (Mea sured) V205 % (Measured) TotalV205 Mt (In dica ted) V205 % (Indicated) TotalV205 Mt (In ferred) V205 % (Inferred)	C o m p a n y ASX C o de Pro ject Na m e Lo ca tio n To ta l Reso urce V205 % To ta l V205 Mt (Mea sured) V205 % (Measured) TotalV205 Mt (In dica ted) V205 % (Indicated) TotalV205 Mt (In ferred) V205 % (Inferred)	C o m p a n y ASX C o de Pro ject Na m e Lo ca tio n To ta l Reso urce V205 % To ta l V205 Mt (Mea sured) V205 % (Measured) TotalV205 Mt (In dica ted) V205 % (Indicated) TotalV205 Mt (In ferred) V205 % (Inferred)	C o m p a n y ASX C o de Pro ject Na m e Lo ca tio n To ta l Reso urce V205 % To ta l V205 Mt (Mea sured) V205 % (Measured) TotalV205 Mt (In dica ted) V205 % (Indicated) TotalV205 Mt (In ferred) V205 % (Inferred)	C o m p a n y ASX C o de Pro ject Na m e Lo ca tio n To ta l Reso urce V205 % To ta l V205 Mt (Mea sured) V205 % (Measured) TotalV205 Mt (In dica ted) V205 % (Indicated) TotalV205 Mt (In ferred) V205 % (Inferred)	C o m p a n y ASX C o de Pro ject Na m e Lo ca tio n To ta l Reso urce V205 % To ta l V205 Mt (Mea sured) V205 % (Measured) TotalV205 Mt (In dica ted) V205 % (Indicated) TotalV205 Mt (In ferred) V205 % (Inferred)	C o m p a n y ASX C o de Pro ject Na m e Lo ca tio n To ta l Reso urce V205 % To ta l V205 Mt (Mea sured) V205 % (Measured) TotalV205 Mt (In dica ted) V205 % (Indicated) TotalV205 Mt (In ferred) V205 % (Inferred)	C o m p a n y ASX C o de Pro ject Na m e Lo ca tio n To ta l Reso urce V205 % To ta l V205 Mt (Mea sured) V205 % (Measured) TotalV205 Mt (In dica ted) V205 % (Indicated) TotalV205 Mt (In ferred) V205 % (Inferred)	C o m p a n y ASX C o de Pro ject Na m e Lo ca tio n To ta l Reso urce V205 % To ta l V205 Mt (Mea sured) V205 % (Measured) TotalV205 Mt (In dica ted) V205 % (Indicated) TotalV205 Mt (In ferred) V205 % (Inferred)	C o m p a n y ASX C o de Pro ject Na m e Lo ca tio n To ta l Reso urce V205 % To ta l V205 Mt (Mea sured) V205 % (Measured) TotalV205 Mt (In dica ted) V205 % (Indicated) TotalV205 Mt (In ferred) V205 % (Inferred)	C o m p a n y ASX C o de Pro ject Na m e Lo ca tio n To ta l Reso urce V205 % To ta l V205 Mt (Mea sured) V205 % (Measured) TotalV205 Mt (In dica ted) V205 % (Indicated) TotalV205 Mt (In ferred) V205 % (Inferred)
King River Copper	KRC	SpeewahProject	Wyndam Port, North West North West WA	4,712 Mt	0.30%	322 Mt	0.32%	1,054 Mt	0.33%	3,335 Mt	0.29%
QEM Limited	QEM	Julia Creek Project	North West QLD, Australia	2,760 Mt	0.30%	N/A	N/A	220 Mt	0.29%	2,540 Mt	0.31%
Horizon Minerals	HRZ	Richmond Vanadium Project	Richmond / Julia Creek, QLD	1,838 Mt	0.36%	N/A	N/A	430 Mt	0.50%	1408 Mt	0.33%
Vanadium Resources	VN8	SPD Project	South Africa	662 Mt	0.78%	92 Mt	0.77%	284 Mt	0.78%	285 Mt	0.77%
Neometals	NMT	Barrambie Project	Barrambie, WA	280 Mt	0.44%	N/A	N/A	187 Mt	0.46%	93 Mt	0.40%
Australian Vanadium	AVL	Australian Vanadium Project Project	Murchison Province, WA Province, WA	208 Mt	0.74%	10.1 Mt	1.14%	70 Mt	0.72%	128 Mt	0.73%

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King River Copper: https://www.asx.com.au/asxpdf/20190401/pdf/443ysh379b4xy3.pdf Horizon Minerals: https://www.asx.com.au/asxpdf/20200616/pdf/44jp422n1x1m0r.pdf Vanadium Resources: https://www.asx.com.au/asxpdf/20200429/pdf/44hbr074305tkn.pdf Neometals: https://www.asx.com.au/asxpdf/20190522/pdf/4458j3kk0nlpxq.pdf Australian Vanadium: https://www.asx.com.au/asxpdf/20200305/pdf/44fs1hgjl0mm5s.pdf

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Drilling at QEM’s Flagship Julia Creek Project - May 2019

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Julia Creek Resource Overview

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Table 1: Summary of JORC Mineral Resource Estimate

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Note:

1. The estimate uses a minimum cut-off of 0.2% V2O5 for the oil shale units, and minimum cut-off of 0.15% V2O5 for the Coquina units.

2. The total resource tonnage reported is rounded to reflect the relative uncertainty in the estimate categories and component horizons may not sum correctly.

Table 2: Summary of SPE-PRMS Oil Resource

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Note:

1. The total resource tonnage reported is rounded to reflect the relative uncertainty in the estimate and component horizons may not sum correctly.

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Julia Creek Oil Yield

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Source: Measured Group

The estimation methodology used is deterministic. The estimation is based on grids constructed for unit structure, thickness and oil grade parameters

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Contact

Gavin Loyden Managing Director gavin@qldem.com.au +61 7 5646 9553

www.qldem.com.au

Shane Murphy Investor Relations shane.murphy@fticonsulting.com +61 420 945 291

www.qldem.com.au

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Appendix – Vanadium Market

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ENERGY
STORAGE
STEEL MANUFACTURING
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Applications Of Vanadium AEROSPACE AUTOMOTIVE

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Uses of Vanadium

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Renewable Energy Storage

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Competitive Advantages:

• Vanadium redox flow batteries (VRFB’s) are the most efficient battery technology for utility scale renewable energy storage, including wind and solar

• Higher levels of safety & stability with proven, reliability, scalability & durability

• Load levelling function, reducing the need for expensive gas peaker plants

• Long term cost advantage over competing battery technologies

• The global VRB market size was assessed at USD $142.1 million in 2017 and is anticipated to expand at a CAGR of 59.7% over the forecast for the period from 2018 to 2022

• Currently <9% only of vanadium supply is used for VRFBs, with this figure set to grow significantly over the coming years

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Source: https://www.energyandcapital.com/articles/the-best-thing-since-lithium/1531 Mining Journal June 2018

113 VRFB Installs Worldwide

COUNTRY	VRFBs	kW	kWh
Australia	7	945	4629.90
Barbuda	1	3000	12000.00
Botswana	1	112	560.00
Canada	3	2500	10000.00
China	17	15825	48005.00
Czech Rep.	3	47	209.90
Denmark	3	40	260.00
Germany	15	1530	86190.00
India	4	155	740.15
Indonesia	2	400	500.00
Italy	5	631	2610.00
Japan	5	2330	7481.00
Netherlands	1	10	80.00
Portugal	5	5	60.00
Singapore	1	250	2000.00
Slovenia	1	10	45.00
South Africa	2	745	2950.00
South Korea	5	1250	4900.00
Spain	4	220	800.00
Sweden	1	800	1800.00
Switzerland	2	210	460.00
UK	5	805	5180.00
USA	17	7418	33173.70
Austria	1	14	84.00
Kenya	1	140	84.00
Slovakia	2	107	640.00
UAE	1	10	40.00

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Source: Vanitec 2020

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Construction

• Vanadium plays an essential role as an alloy of steel to provide strength and is also added to increase fire resistance and increase tensile strength.

• Announced in February 2018, with implementation by the 1[st] of November 2018, China revised steel rebar standards to limit the use of inferior strength steels in its ever-growing construction industry

• Due to these revised standards, global demand for vanadium is set to increase, with this development expected to add between 10,000t to 15,000t of vanadium demand, and signs of an increase in demand is already evident in the market today.

• Global crude steel production reached 1,869.9 million tonnes (Mt) for the year 2019, up by 3.4% compared to 2018. (Source: https://www.worldsteel.org/mediacentre/press-releases/2020/Global-crude-steel-output-increases-by-3.4--in2019.html

• Vanadium demand is conservatively forecasted to grow at a compound annual growth rate of 5.6%, reaching 133,000t in 2025, and supply including all idle capacity and expansion of existing primary mines, predicted to grow at a CAGR of 3.7% to 111,000t in 2025.

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Aerospace & Automotive

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• Aerospace - Increased aircraft are required to service larger addressable air-travel market

• Both Boeing & Airbus both forecast annual global air traffic growth between 2016 and 2035 of nearly 5%. A titanium alloy containing 4% vanadium and 6% aluminium (Ti6Al4V) has been used extensively for blades, discs and casings of the compressors in many designs of the aero-engine gas turbine

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• The development of new titanium alloys continues with the Vanadium component ranging from 8, 10 to 15%, which results in even higher strengths and the potential to make important contributions to weight reduction

• Source: http://www.nextsourcematerials.com/vanadium/about-vanadium/ Mining Journal

• June 2018

• Automotive – Today, 45% of vanadium goes into cars , and it is estimated that 85% will be used in manufacturing auto vehicles by 2025. This will reduce the weight of cars, thereby increasing their fuel efficiency and be able to meet fuel economy standards. (Source: Vanadium Corp)

• • Engine components such as crankshafts and connecting rods are highly stressed and must withstand many cycles. Vanadium micro-alloyed forging steels are widely used for these parts, as well as other applications in the chassis, drivetrain, suspension and valve springs. (source: Vanitec.org)

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