QEM LIMITED — Capital/Financing Update 2018

Oct 16, 2018

QEM Limited ACN 167 966 770

SECOND SUPPLEMENTARY PROSPECTUS

1. Important information

This is a supplementary prospectus ( Second Supplementary Prospectus ) intended to be read with the supplementary prospectus dated 12 September 2018 ( First Supplementary Prospectus ) and the replacement prospectus dated 20 August 2018 ( Replacement Prospectus ) (together with the First Supplementary Prospectus, the Prospectus ) issued by QEM Limited ACN 167 966 770 ( Company ).

This Second Supplementary Prospectus is dated 24 September 2018 and was lodged with ASIC on that date. Neither ASIC nor ASX take any responsibility as to the contents of this Second Supplementary Prospectus.

This Second Supplementary Prospectus should be read together with the Prospectus. Other than the changes set out in this Second Supplementary Prospectus, all other details in relation to the Prospectus remain unchanged. To the extent of any inconsistency between this Second Supplementary Prospectus and the Prospectus, the provisions of this Second Supplementary Prospectus will prevail. Unless otherwise indicated, terms defined and used in the Prospectus have the same meaning in this Second Supplementary Prospectus.

The Company has issued both a printed and electronic version of this Second Supplementary Prospectus and the Prospectus. Electronic versions of both may be accessed at www.qldem.com.au.

This Second Supplementary Prospectus and the Prospectus are important documents that should be read in their entirety. If you are in any doubt as to the contents of this Second Supplementary Prospectus or the Prospectus, you should consult your stockbroker, lawyer, accountant or other professional adviser without delay.

2. Supplementary Prospectus

2.1 Purpose

This Second Supplementary Prospectus has been prepared to advise investors that nonexecutive director, Mr Benjamin Cooper, has resigned as a director of the Company, effective from 24 September 2018.

2.2 No investor action required

As the content of this Second Supplementary Prospectus is not considered by the Company to be materially adverse to investors, no action needs to be taken by investors who have already submitted applications for Shares under the Replacement Prospectus. Accordingly, there are no withdrawal rights offered pursuant to this Second Supplementary Prospectus.

This is a Second Supplementary Prospectus intended to be read with the Supplementary Prospectus dated 12 September 2018 and the Replacement Prospectus dated 20 August 2018 issued by QEM Limited.

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3. Amendments to the Prospectus

3.1 Removal of references to Mr Benjamin Cooper

As a result of Mr Cooper's resignation, the references to Mr Cooper in the following sections of the Prospectus are deleted:

• (a) Corporate Directory;

• (b) The following sections of the Investment Overview:

• (i) Who are the Directors?;

• (ii) What benefits are being paid to the Directors?; and

• (iii) Director disclosures;

• (c) Section 5.1 – Board of Directors;

• (d) Section 5.2 – Directors' Profiles;

• (e) Section 5.3 – Director Disclosures;

• (f) Section 5.6 – Security holdings of Directors;

• (g) Section 5.7 – Remuneration of Directors; and

• (h) Section 6.2(d) – Letters of Appointment – Non-Executive Directors.

3.2 Section 5.10 - Departures from Corporate Governance Recommendations

As a result of Mr Cooper's resignation, the Board is now comprised of a majority of independent directors. As such, the reference in Section 5.10 of the Prospectus to Recommendation 2.4 is deleted.

4. Consents

The Company confirms that as at the date of this Second Supplementary Prospectus, each of the parties that have been named as having consented to being named in the Replacement Prospectus and First Supplementary Prospectus have not withdrawn that consent.

This is a Second Supplementary Prospectus intended to be read with the Supplementary Prospectus dated 12 September 2018 and the Replacement Prospectus dated 20 August 2018 issued by QEM Limited.

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5. Directors’ authorisation

This Second Supplementary Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors.

In accordance with section 720 of the Corporations Act, each Director has consented to the lodgement of this Second Supplementary Prospectus with ASIC and has not withdrawn that consent.

This Second Supplementary Prospectus is signed for and on behalf of the Company by:

____ David Fitch Executive Director Dated: 24 September 2018

This is a Second Supplementary Prospectus intended to be read with the Supplementary Prospectus dated 12 September 2018 and the Replacement Prospectus dated 20 August 2018 issued by QEM Limited.

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