QEM LIMITED — Interim / Quarterly Report 2022

Oct 28, 2021

ASX ANNOUNCEMENT ASX ANNOUNCEMENT

==> picture [106 x 46] intentionally omitted <==

ASX: QEM

29 October 2021

Quarterly update for the period ending 30 September 2021

QEM Limited (ASX: QEM) (“ QEM ” or “ Company ”) is pleased to provide an update on its activities for the quarter ending 30 September 2021.

QEM Managing Director, Mr Gavin Loyden, said during the quarter and post-quarter the Company laid the foundations to make significant strides in continuing to successfully develop the Julia Creek vanadium and oil shale project and associated green hydrogen potential.

“The well-supported capital raise we undertook during the quarter enables QEM to accelerate the progression of the Julia Project in North Queensland and further define the project’s world-class potential,” Mr Loyden said.

“We are fully funded to complete the oil and vanadium pilot plant development and subsequently advance to the first stage of the Julia Creek project pre-feasibility study, as well as the next round of wind and solar power studies. This will build upon the extensive test work we have already methodically completed.

“The broader macro-economic environment is also highly-favourable for QEM, with the price of crude oil recently surpassing US$85 a barrel to reach multi-year highs, and the demand for vanadium primed for significant growth stemming from rising global steel production as well as an increased uptake of vanadium redox flow batteries.”

Oil & Vanadium Pilot Plant

On 9 July 2021 the hazard and operability (HAZOP) study on the bench-scale oil and vanadium pilot plant was completed at the Melbourne headquarters of HRL Technology Group Pty Ltd, where the pilot plant will be installed and operated.

The bench-scale pilot plant is intended to further validate and expand upon QEM’s positive extraction test results recorded to date.

A total of $126k was paid towards pilot plant fabrication costs during the quarter. QEM is on target to commence operational activity at the bench-scale pilot plant during 1H FY22.

2021 Drilling Program

The infill drilling program will commence in mid-November 2021 in the north-eastern EPM27057 area, with the aim of upgrading the vanadium resource to Indicated and targeting the area for predicted higher oil assays.

This will be a 6 hole campaign utilising 4C core drilling diameter to maximise volumes of retrieved material for use in pilot plant testing. It is expected that a total of 1100kgs of core sample will be recovered for use in the pilot plant test program.

Two of the holes twinned with historical holes 592_710 & 594_710 for the purpose of confirming historical results. Once confirmed, this historic work can be relied on for future reference.

+61(0) 8 9481 0389

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

www.qldem.com.au info@qldem.com.au

ASX ANNOUNCEMENT

==> picture [203 x 74] intentionally omitted <==

----- Start of picture text -----

ASX: QEM
----- End of picture text -----

Siecap

Siecap continued to assist the Company in its project management role during the quarter with marketing studies into the vanadium pentoxide, transport fuels and green hydrogen completed as well as the development of a project development strategy and scoping study for the mining, extraction, processing, and export of vanadium pentoxide, transport fuels and associated green hydrogen from Julia Creek.

Additionally, Siecap commenced work on grants co-ordination and advancing the funding application process for QEM in line with the project development strategy.

Julia Creek Renewable Energy- Solar/ Wind Studies

On 9 July 2021, with subsequent related additional information released on 19 July 2021, QEM announced an update of assessment work being undertaken by DNV Australia (“DNV)” into power generation opportunities to underpin the mining operations on site at the Julia Creek vanadium and oil shale project.

DNV’s preliminary assessment indicated that wind power and a complementary solar farm could be considered as a conceptually feasible source of power generation at the Julia Creek project.

DNV recommended further solar farm and wind farm optimisation studies, including on-site stations to monitor long-term wind speed and solar resources to provide enhanced confirmation of the initial encouraging results and determine the most suitable solution for the Julia Creek project.

QEM remains on track to commence these optimisation studies during this quarter.

Capital Raising

On 4 August 2021, QEM announced the completion of a ~$2 million placement to institutional, professional and sophisticated investors at $0.15 per share.

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 at Julia Creek, as well as the next round of wind and solar power studies. This will further define the Company’s oil and vanadium development strategy and associated hydrogen energy requirements.

The placement received strong support from existing QEM shareholders, including non-executive director and largest shareholder David Fitch, who subscribed for $580,000 (“Director Shares”).

Local Power Supply

Post quarter, early this month, QEM issued a connection enquiry with the proposed CopperString 2.0 project.

Copperstring 2.0 is a $1.5 billion, 1,000km high voltage transmission project, to service Townsville and the North West Minerals Province and will run within 10km of the Julia Creek vanadium and oil shale project, potentially allowing for efficient access, to the electricity grid, either as a consumer and/or an exporter of surplus Julia Creek project power.

John O’Brien, Executive Chairman of CopperString 2.0 proponent CuString Pty Ltd, welcomed QEM’s connection enquiry and said that connection to CopperString’s high voltage transmission network could be utilised by QEM to accommodate shortfalls and surpluses in power requirements for their industrial complex.

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

==> picture [203 x 74] intentionally omitted <==

----- Start of picture text -----

ASX: QEM
----- End of picture text -----

“We believe that affordable and reliable electricity delivered by CopperString’s connection to the National Electricity Market will help QEM to fulfil its ambitions and also unlock the globally significant reserves of critical minerals and rare earths in the North West Minerals Province,” Mr O’Brien said.

Contract Signed with Epic Environmental

Post quarter, on 27 October 2021, QEM announced it signed a contract with specialist environmental consultant Epic Environmental Pty Ltd (“Epic Environmental”) for the provision of an environmental permitting pathway and assistance with related approvals.

Brisbane-based Epic Environmental’s scope of works includes leading the development of an Environmental Impact Statement, undertaking extensive technical studies at Julia Creek, coordinating environmental approval applications and establishing a Progressive Rehabilitation and Closure Plan.

Board Appointment

Post quarter, on 20 October 2021, QEM announced it appointed John Henderson to the Company’s Board of Directors as a Non-executive Director.

Mr Henderson, who commenced at QEM on October 20, has over 40 years’ experience in major project development, which includes executive roles with oil and mining multinationals, as well as mid-tier and start-up energy companies.

Most recently, Mr Henderson has been the Head of Advisory – Energy and Projects at Siecap Pty Ltd (“Siecap”), a specialist project management consultant firm based in Brisbane.

The work Siecap is undertaking will continue as scheduled following Mr Henderson’s appointment.

COVID-19 Impacts

QEM is pleased to report that it continues to experience no material COVID-19 impacts on its operations. The Company is maintaining adherence to Government directives to ensure it does its part to mitigate the risk of an outbreak.

Related Party Payments

ASX Listing Rule 5.3.5: Payments to related parties of the Company and their associates during the Quarter totalled $108k. The Company advises that this relates to non-executive director’s fees, executive directors’ salaries and a technical consulting fee to Energy Source LLC (an entity associated with Mr Daniel Harris).

Other ASX requirements

ASX Listing Rule 5.3.1: Exploration and Evaluation Expenditure during the Quarter was $303k and expenditure incurred in relation to the Green Hydrogen Project was $30k. The Company also incurred $126k in relation to pilot plant fabrication costs during the quarter.

Full details of activities during the Quarter are set out above.

ASX Listing Rule 5.3.2, there were no mining production and development activities during the Quarter.

QEM Limited John Foley Chairman www.qldem.com.au Level 11, 216 St Georges Terrace Gavin Loyden Managing Director info@qldem.com.au Perth WA 6000 Australia John Henderson Non-Executive Director +61(0) 8 9481 0389 Daniel Harris Non-Executive Director David Fitch Non-Executive Director

==> picture [490 x 36] intentionally omitted <==

ASX ANNOUNCEMENT

==> picture [203 x 74] intentionally omitted <==

----- Start of picture text -----

ASX: QEM
----- End of picture text -----

Tenement Schedule

In line with obligations under ASX Listing Rule 5.3.3, QEM Limited provides the following information with respect to its Mining Tenement holdings as at 30 September 2021.

Project	Country	Tenement	Status	% Held	Change During Quarter
Julia Creek	Australia	EPM25662	Granted	100%	-
Julia Creek	Australia	EPM25681	Granted	100%	-
Julia Creek	Australia	EPM26429	Granted	100%	-
Julia Creek	Australia	EPM27057	Granted	100%	-

- END -

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 3303 0161 P: +61 420 945 291 E: gavin@qldem.com.au E: shane.murphy@fticonsulting.com

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 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 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.

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

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

Rule 5.5

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

quarterly cash	flow report
Name of entity
QEM Limited
ABN 13 167 966 770	Quarter ended (“current quarter”)
13 167 966 770	30 September 2021

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) staff costs (e) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Government grants and tax incentives 1.8 Payments for Green Hydrogen Project 1.9 Net cash from / (used in) operating activities	(303) (294) 1 (30)	(303) (294) 1 (30)
	(626)	(626)
2. Cash flows from investing activities 2.1 Payments to acquire or for: (a) entities (b) tenements (c) property, plant and equipment (d) exploration & evaluation (e) investments (f) other non-current assets	(126)	(126)

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 1

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
2.2 Proceeds from the disposal of: (a) entities (b) tenements (c) property, plant and equipment (d) investments (e) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material) 2.6 Net cash from / (used in) investing activities
	(126)	(126)
3. Cash flows from financing activities 3.1 Proceeds from issues of equity securities (excluding convertible debt securities) 3.2 Proceeds from issue of convertible debt securities 3.3 Proceeds from exercise of options 3.4 Transaction costs related to issues of equity securities or convertible debt securities 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (provide details if material) 3.10 Net cash from / (used in) financing activities	2,013 (132)	2,013 (132)
	1,881	1,881
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above)	1,327 (626) (126) 1,881	1,327 (626) (126) 1,881

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 2

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	-	-
	2,456	2,456
5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	2,456 - - -	119 1,208 - -
	2,456	1,327

6. Payments to related parties of the entity and their associates	Current quarter $A'000
6.1 Aggregate amount of payments to related parties and their associates included in item 1 108 6.2 Aggregate amount of payments to related parties and their associates included in item 2 Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments.	108

7. 7.1 7.2 7.3 7.4 7.5 7.6	Financing facilities Note: the term “facility’ includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity. Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 Loan facilities Credit standby arrangements Other (please specify) Total financing facilities Unused financing facilities available at quarter end Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 3

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

8.	Estimated cash available for future operating activities	$A’000
8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8	Net cash from / (used in) operating activities (item 1.9) (626) (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) - Total relevant outgoings (item 8.1 + item 8.2) (626) Cash and cash equivalents at quarter end (item 4.6) 2,456 Unused finance facilities available at quarter end (item 7.5) - Total available funding (item 8.4 + item 8.5) 2,456 Estimated quarters of funding available (item 8.6 divided by item 8.3) 3.92 Note: if the entity has reported positive relevant outgoings (ie a net cash inflow) in item 8.3, answer item 8.7 as “N/A”. Otherwise, a figure for the estimated quarters of funding available must be included in item 8.7. If item 8.7 is less than 2 quarters, please provide answers to the following questions: 8.8.1 Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not?	(626) - (626) 2,456 -
		2,456
	Answer: N/A
	8.8.2 Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?
	Answer: N/A
	8.8.3 Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?
	Answer: N/A
	Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2 and 8.8.3 above must be answered.

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

Date: 29 October 2021

Authorised by: By the Board

(Name of body or officer authorising release – see note 4)

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 4

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Notes

1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”. If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the [ name of board committee – eg Audit and Risk Committee ]”. If it has been authorised for release to the market by a disclosure committee, you can insert here: “By the Disclosure Committee”.

5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations , the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 5