QEM LIMITED — Capital/Financing Update 2021

May 23, 2021

ASX ANNOUNCEMENT ASX ANNOUNCEMENT

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24 May 2021

QEM Advances to Pilot Plant Stage

• Recent test results provide QEM with ability and confidence to commence development of a bench-scale pilot plant for larger scale testing

• Bench-scale pilot plant targeted to be operational during 1H FY22

QEM Limited (ASX: QEM) (“QEM” or “Company”) is pleased to announce it is progressing towards developing a bench-scale pilot plant, based on independent test work, for its 100%-owned Julia Creek vanadium and oil shale project in North Queensland.

HRL Technology Group Pty Ltd (HRL) recently completed a suite of tests designed to optimise the production, separation and processing route of oil and gas from the extraction process at the Julia Creek project (see ASX announcement dated 15 April 2021). The novel solvent extraction technology utilised in the tests delivered results indicating a more efficient and environmentally-friendly process compared to conventional pyrolysis or retorting technologies.

The recent tests revealed that nearly 95% of the oil and solvent could be recovered through an enhancement of the current extraction process, with the residual oil expected to be recovered in downstream processing, which indicates potential for the extraction process to be more cost-effective.

The extraction technology being developed, also has been shown to reduce the carbonates in the shale which release carbon dioxide during vanadium leaching processes, thus reducing overall CO2 emissions from the leaching step.

The latest tests reaffirmed and built on oil extraction testing HRL has previously conducted for QEM (see ASX announcement dated 21 July 2020), which also delivered successful results.

The Company has completed undertaken vanadium extraction test work (see ASX announcement dated 11 August 2020), which also reported successful results. Subsequently, QEM now has sufficient evidence to progress towards developing a bench-scale pilot plant that will enable larger scale testing.

QEM Managing Director Gavin Loyden said he was delighted with the test results.

“As fuel security in Australia continues to grow as a national security issue, it is very pleasing to see that QEM is increasingly firming up to be a key domestic source of quality hydrocarbon supply,” Mr Loyden said.

“The highly-successful results will enable the Company to commence work on a bench scale pilot plant, which marks a major step forward in developing Julia Creek and unlocking the project’s significant value potential, including vanadium extraction and hydrogen production.”

“We believe we now have as much information as we can glean at the laboratory scale and that has provided us with the confidence to take the next major step in the development of this project.”

Bench-scale Pilot Plant

QEM has engaged E2C Advisory Pty Ltd to undertake the design and selection of the bench-scale pilot plant to facilitate more advanced test work on a larger scale.

QEM Limited John Foley Chairman Level 11, 216 St Georges Terrace Gavin Loyden Managing Director Perth WA 6000 Australia Daniel Harris Non-Executive Director David Fitch Non-Executive Director

www.qldem.com.au info@qldem.com.au +61(0) 8 9481 0389

ASX ANNOUNCEMENT

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Larger scale processing will generate the bulk product material required to optimise the vanadium recovery from the Julia Creek resource.

Specification of the unit is nearing completion and the procurement process has commenced.

Based on current information, QEM is targeting the commencement of operational activity at the benchscale pilot plant during 1H FY22.

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

*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.

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 liquid fuels and in response to a global vanadium deficit, also aims to become a global supplier of high-quality vanadium pentoxide, to both the nascent energy storage sector and the global 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 less than 16km 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 John Foley Chairman Level 11, 216 St Georges Terrace Gavin Loyden Managing Director Perth WA 6000 Australia Daniel Harris Non-Executive Director David Fitch Non-Executive Director

www.qldem.com.au info@qldem.com.au +61(0) 8 9481 0389