QEM LIMITED — Capital/Financing Update 2021

Aug 3, 2021

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4 August 2021

$2m Placement to Accelerate Julia Creek Development

Highlights

• Successful completion of QEM’s $2m placement to institutional, professional and sophisticated investors at $0.15 per share.

• Funds raised will be applied to the construction of an oil & vanadium pilot plant and additional wind & solar studies.

• Strong support from existing shareholders including non-executive director and major shareholder David Fitch, who will subscribe for $580,000 to maintain his ~28% shareholding.

• The Placement was coordinated by Fresh Equities Pty Ltd & Viriathus Capital Pty Ltd

• QEM is now sufficiently funded for the pilot plant and stage 1 of the project PFS.

QEM Limited (ASX:QEM) is pleased to announce the Company has received commitments to raise $2m via a placement to new and existing institutional, sophisticated and professional investors. The placement will allow QEM to accelerate the development of its 100% owned Julia Creek Vanadium-Oil Project in Queensland and further define the project’s world-class potential.

Together with existing cash reserves, the proceeds of the raise will sufficiently fund the Company through the oil and vanadium pilot plant development and operation as well as the next round of project studies. This will further define the Company’s oil and vanadium development strategy and associated hydrogen and power requirements.

The vanadium market is expected to see continued tightness from rising global steel production and increased uptake of safe and scalable vanadium redox flow batteries (VRFB), suitable for grid scale energy storage. This demand for grid scale batteries is compounded by the increasing supply of intermittent renewable energy generation. With a 2.76Bt JORC 2012 vanadium resource (220Mt indicated and 2,540Mt inferred, Table 1), QEM is well placed to leverage increased uptake of this emerging battery technology. In addition, the rising political importance of fuel security has greatly benefited the Company’s plan to concurrently develop Julia Creek’s substantial oil resource 783MMBl 3C Contingent Oil Resource (Table 2).

QEM Managing Director Gavin Loyden commented:

“It has been fantastic to see strong support for our placement offer, in particular from our major shareholder, whose continued support indicates a strong endorsement of our strategy, as we advance onto the next chapter of development at Julia Creek. The funds will allow us to

QEM Limited Level 11, 216 St Georges Terrace Perth WA 6000 Australia

Web: www.qldem.com.au Email: info@qldem.com.au Tel: (08) 9481 0389

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complete our oil and vanadium pilot plant and subsequent six months of operations to validate our strong extraction test results recorded to date.

This comes at a time of strong vanadium pricing (USD$9.80/lb 98% V2O5 Flake) and the increasingly apparent need for grid support batteries if we are to complete our transition to renewable and carbon-free power generation. Yet, as demonstrated by the recent Neoen Battery fire in Victoria, we must recognize the superior safety qualities of vanadium redox flow batteries over large scale lithium battery systems. Given vanadium redox batteries noncombustible and fully recyclable properties, we are excited to support this emerging technology and look forward to becoming a nationally significant developer of vanadium and oil.

I am also delighted to welcome our new shareholders to QEM and we look forward to updating the market on our progress.”

About the placement

QEM will raise $2,013,500 before costs via a placement of 13,423,333 fully paid ordinary shares at $0.15 per share.

This includes participation by major shareholder and non-executive director David Fitch for $580,000 (“Director Shares”) to maintain his ~28% shareholding in QEM.

The allotment of 3,866,667 Director Shares will be subject to shareholder approval, whilst the 9,556,666 Shares to unrelated parties (“New Shares”) will be issued under existing LR7.1 capacity.

Settlement of the New Shares is scheduled to occur on Monday 9[th] August 2021 with allotment to occur on Tuesday 10[th] August 2021. A General Meeting to approve the Director Shares is scheduled for mid-September 2021.

Fresh Equities Pty Ltd and Viriathus Capital Pty Ltd acted as Joint Lead Managers. A 6% fee will be paid on the New Shares.

ENDS

This announcement was authorised for release on the ASX by the Board of QEM Limited.

For further information, please contact:

Gavin Loyden Shane Murphy Managing Director Investor Relations P: +61 7 5646 9553 P: +61 420 945 291 E: gavin@qldem.com.au E: shane.murphy@fticonsulting.com

QEM Limited Level 11, 216 St Georges Terrace Perth WA 6000 Australia

Web: www.qldem.com.au Email: info@qldem.com.au Tel: (08) 9481 0389

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The information in this announcement that relates to the mineral resource and contingent resource estimates for the Company’s Julia Creek Project was first reported by the Company in its IPO prospectus dated 20 August 2018 and supplementary prospectus dated 12 September 2018 (together, the “Prospectus”) and the subsequent resource upgrade announcement (“Resource Upgrade”) dated 14 October 2019. The Company confirms that it is not aware of any new information or data that materially affects the information included in the Prospectus and Resource Upgrade, and in the case of estimates of Mineral Resources and Contingent Resources, that all material assumptions and technical parameters underpinning the estimates in the Prospectus and Resource Upgrade continue to apply and have not materially changed.

Table 1: Summary of JORC Mineral Resource Estimate

				Total	Total
ResourceClass	Strat.Unit	Mass (Mt)	AverageThickness(m)	InsituDensity(gm/cc)	V2O5(wt%)	Cu(ppm)	Mo(ppm)	Ni(ppm)	Zn(ppm)	Al(ppm)
Indicated	CQLA	73	3.16	2.27	0.25	155	138	123	780	4752
	CQLB	67	2.97	2.24	0.28	182	168	142	890	5706
	OSU	40	1.94	2.08	0.33	223	153	191	1087	55317
	OSL	38	1.87	2.11	0.32	199	149	184	1015	55009
Sub-total		220
Inferred	CQLA	687	2.57	2.28	0.23	154	139	121	819	2854
	CQLB	874	3.33	2.15	0.38	220	221	201	1184	5323
	OSU	504	2.01	2.11	0.30	232	147	188	1148	62477
	OSL	481	1.98	2.13	0.29	212	134	171	1058	60316
Sub-total		2,540
Total		2,760		2.18	0.30	201	166	170	1043	26100

Table 2: Summary of SPE-PRMS Contingent Oil Resource

			Total
Strat.Unit	Mass (Mt)	Average Thickness(m)	Oil Yield(L/tonne)	MMBarrels(insitu-PIIP)	MMBarrels 3C
CQL	1,701	5.93	44	446	401
OSU	544	2.01	72	231	208
OSL	518	1.97	63	193	174
TOTAL	2,760		53	870	783

QEM Limited Level 11, 216 St Georges Terrace Perth WA 6000 Australia

Web: www.qldem.com.au Email: info@qldem.com.au Tel: (08) 9481 0389

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About QEM

QEM Limited (ASX:QEM) is a publicly listed company which is focussed on the exploration and development of its flagship Julia Creek Project, covering 250km² in the Julia Creek area of North Western Queensland.

The Julia Creek vanadium / oil shale project is a unique world class resource with the potential to deliver innovative energy solutions, through the production of energy fuels and vanadium pentoxide. QEM strives to become a leading producer of transport fuels, including hydrogen and in response to a global vanadium deficit, also aims to become a global supplier of highquality vanadium pentoxide, to both the nascent energy storage sector and the Australian steel industry.

This globally significant JORC (2012) Mineral Resource of 2,760 Mt @ 0.30% V2O5 is one of the single largest ASX listed vanadium resources and represents a significant opportunity for development.

The tenements form part of the vast Toolebuc Formation, which is recognised as one of the largest deposits of vanadium and oil shale in the world and located 5.5km east of the township of Julia Creek. In close proximity to all major infrastructure and services, the project is intersected by the main infrastructure corridor of the Flinders Highway and Great Northern Railway, connecting Mt Isa to Townsville.

QEM Limited Level 11, 216 St Georges Terrace Perth WA 6000 Australia

Web: www.qldem.com.au Email: info@qldem.com.au Tel: (08) 9481 0389