QEM LIMITED — Investor Presentation 2021

Mar 16, 2021

QEM Limited Dual Commodity Opportunity

ASX: QEM

INVESTOR PRESENTATION March 2021

Disclaimer

QEM Overview

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

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

Targeting Dual commodities of transport fuels and vanadium pentoxide (V2O5)

Hydrogen strategy brought forward to meet Govt policy and industry needs

Transport fuels to support Australian resilience in post COVID economy

Vanadium defined as Critical Mineral by Australian and US Governments

783MMBL's of oil in the 3C category

Team that delivers

The Team

John Foley Gavin Loyden Daniel Harris David Fitch

ASX Symbol: QEM
Shares on Issue	100 million
Market Cap (16 March 2021)	$16.5m
Share Price (16 March 2021)	$0.165
Cash (as at 31 December 2020)	$2.01m

Major Shareholders
Directors	49.48%

Julia Creek Project

Key Facts

• Shallow oil-bearing shale, mineralised with vanadium
• Tier-1 Mining Location
• Close to all infrastructure and services
• Associated Hydrogen production now accelerated
• Critical Minerals designation

Significant Resource

• Total JORC Inferred resource 2,760 Mt
• JORC Indicated area of 220Mt
• Average content V2O5 @ 0.30%
• Oil component- 783MM Barrels in 3C Category

Method

• Green Hydrogen generated on site using solar
• Standard open cut method
• Low strip ratio
• Extraction methods being investigated are safe, sustainable and environmentally friendly
• Test work to date shows 200% yield achievable for oil extraction (based on Modified Fischer Assay- MFA)
• 90% extraction rate for V2O5 through leaching

Julia Creek Project Location

Hydrogen Strategy Accelerated

As an integral part of QEM's overall strategy to develop the Julia Creek Project, we seek to accelerate the solar energy and hydrogen components of the project and bring them forward.

QEM has recently announced studies have begun into the potential for a solar project that can deliver to power a GREEN electrolyser for hydrogen production.

It is envisioned that this hydrogen will be utilised within the QEM Julia Creek project for the upgrading of raw hydrocarbons into transport fuels, but also to create a hydrogen hub for the North West Minerals Province.

The solar project could also deliver energy into the grid, while the balance of the Julia Creek project is being developed, subject to positive study outcomes, funding and government approvals. This aspect of the project could potentially financially underpin continued development of the Julia Creek project by QEM, prior to delivery of the main project, again subject to positive study outcomes.

Other mineral projects under development in the region may also benefit from the addition of a reliable, renewable energy supply and hydrogen for mining and transport.

Source: https://www.dsdmip.qld.gov.au/\_\_data/assets/pdf\_file/0018/12195/queensland-hydrogen-strategy.pdf Queensland Hydrogen Industry Strategy 2019–2024

Sources:

Qld Hydrogen Industry Strategy

• Queensland State Government has a vision to back creation of a Hydrogen industry specifically to support more jobs in regional Queensland (Queensland Hydrogen Industry Strategy 2019-2024)
• First minister for Hydrogen in Queensland appointed November 2020, $19 million committed to state hydrogen strategy, and another $5 million available in second round of Hydrogen Industry Development Fund announced on March 10, 2021
• Underpinned by Australia's National Hydrogen Strategy developed by the COAG Energy Council

"Vision: By 2030, Queensland is at the forefront of renewable hydrogen production in Australia, supplying an established domestic market and export partners with a safe, sustainable and reliable supply of hydrogen."

- Queensland Hydrogen Industry Strategy 2019 - 2024

https://www.dsdmip.qld.gov.au/\_\_data/assets/pdf\_file/0018/12195/queensland-hydrogen-strategy.pdf https://www.industry.gov.au/sites/default/files/2019-11/australias-national-hydrogen-strategy.pdf

Supportive Policy Environment

Julia Creek located in key corridor

Development of Northern Australia and Resource Corridors Government Priority

• Critical Minerals Facilitation Office
• Eastern Resource Corridor
• Queensland Hydrogen Industry Strategy
• Queensland Energy, Renewables and Hydrogen Ministry
• Queensland Department of State Development
• $1.5 Billion Copper String 2.0 project

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

Federal Government Resource Corridors

Greater Fuel Resilience Needed

Government Funding Bodies

• Northern Australian Infrastructure Facility (NAIF) $2.47B for infrastructure development in Northern Australia
• Queensland's Strategic Blueprint for North West Minerals Province (NWMP) $39m over four years.
• Industrial Energy Transformation Studies Program $43m in funding for measures that aim to lower energy prices, reduce emissions and boost the economy
• The Clean Energy Innovation Fund (CEFC) $200m million in early-stage clean technology companies
• Queensland Hydrogen Industry Strategy $19m in support funding for hydrogen projects in the state, particularly in regional areas, with additional $5m announced recently to support feasibility studies.
• Resources Community Infrastructure Fund $100m established by QLD Government
• Exploring for the Future $10m expansion of the Government's program-focussed on new economy minerals such as vanadium

Vanadium Uses

Renewable Energy Storage

Number of Cycles Low Self-discharge Low Environmental Footprint Highly Expandable Generates Low Levels of Heat Charges & Discharges Simultaneously Can Release Energy Instantaneously Suitable for Connection to Power Grid Small Footprint CAN BE COMPLETELY RECYCLED

VANADIUMRedox	LITHIUM
100,000+ (20-30 yrs)	3000-10,000 (5-7 yrs)
	X
	X
	X
	X
	X
	X
	X(Without Inverters)
X
yes	no

Vanadium Redox Flow Battery

Vanadium Market

• Global Production 2020 ~ 102,000 MTV per year
• Expected to grow by 28.31 thousand tons during 2020-2024. (Source: Technavio Global Vanadium Market Report 2020-2024)
• Chinese market tightened due to increased steel production. 1Bt in 2020.
• Vanadium was added to the 'US & Australian Strategic Metals List' in 2018
• Long term average price for commodity grade V2O5 is $8.86/lb USD (inflated to 2017 $USD)
• Only 3 primary producers in the world today, outside of China and Russia.

V2O5 Vanadium Pentoxide Flake 98% Price USD / lb

2 in South Africa and 1 in Brazil

Fuel Resilience

• Australia is an island nation that depends heavily on imported fuel
• Our current stockpile is critically low
• 30 days of petrol for automobiles
• 20 days of diesel
• 20 days of aviation fuel (Australian Petroleum Statistics 2020)
• Australia's obligation as a member of the International Energy Agency (IEA) to hold at least 90 days of supply. Not held since 2012
• Greatly diminished refining capacity 4 remain. All on "life support"
• Dependency on fuel imports for transport has grown from around 60% in 2000 to over 93% today
• COVID-19 has further exposed Australia's lack of resilience in this area
• Government scrambling for solutions. Reserves in Texas = 3 Days supply. 8000kms away
• QEM considers this an opportunity.

Right Project at The Right Time

Vanadium QEM aims to become a leading supplier of high-quality vanadium pentoxide

Dual Commodity Deposit

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

Transport Fuels + Hydrogen

QEM aims to provide innovative and environmentally friendly solutions that are important to our energy future

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

Appendix – A

Julia Creek Resource

Julia Creek Resource Overview

				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
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
Total		2,760		2.18	0.30	201	166	170	1043	26100

Table 1: Summary of JORC Mineral Resource Estimate

Note:

1. The estimate uses a minimum cutoff 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

			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

Note:

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

Julia Creek Oil Yield

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

Peer Comparisons

Company	ASXCode	Project Name	Location	TotalResourceMt	V205%	Total V205Mt(Measured)	V205%(Measured)	Total V205Mt(Indicated)	V205%(Indicated)	Total V205Mt(Inferred)	V205%(Inferred)
King River Copper	KRC	SpeewahProject	Wyndam Port,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 CreekProject	North WestQLD, Australia	2,760 Mt	0.30%	N/A	N/A	220 Mt	0.29%	2,540 Mt	0.31%
Horizon Minerals	HRZ	RichmondVanadium Project	Richmond /Julia Creek, QLD	1,838 Mt	0.36%	N/A	N/A	430 Mt	0.50%	1408 Mt	0.33%
VanadiumResources	VN8	SPD Project	South Africa	662 Mt	0.78%	92 Mt	0.77%	284 Mt	0.78%	285 Mt	0.77%
Neometals	NMT	BarrambieProject	Barrambie, WA	280 Mt	0.44%	N/A	N/A	187 Mt	0.46%	93 Mt	0.40%
AustralianVanadium	AVL	AustralianVanadium Project	MurchisonProvince, WA	208 Mt	0.74%	10.1 Mt	1.14%	70 Mt	0.72%	128 Mt	0.73%

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

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

Appendix – B

Government Policy Support

Government Backing: NAIF

NAIF is a Commonwealth Government agency established to facilitate economic growth by lending to infrastructure projects and businesses in northern Australia and helping to catalyse private sector investment.

NAIF is a $5 billion development financier that provides loans to infrastructure projects in the Northern Territory, Queensland and Western Australia, in the last financial year, NAIF has made 11 Investment Decisions worth more than $1.4billion

A key focus of any financing is to drive public benefit, economic and population growth and Indigenous involvement in northern Australia.

• NAIF can lend up to 100% of the debt and has a higher tolerance for the unique risks of investing in northern Australia including but not limited to, distance, remoteness and climate.

Government Backing: ARENA

ARENA Supports R&D in renewable hydrogen production, storage and use for energy, with the aim of delivering longer-term cost reductions and efficiency gains through innovative, disruptive technology developments.

• feasibility studies for projects involving 100+ MW electrolysers

• commercial-scale deployments involving 10-40+ MW electrolysers focused on industries and applications with large potential demand for hydrogen (e.g. ammonia production, power to gas, etc.) to drive the commercialisation of key component technologies

• demonstration-scale projects involving 1-10 MW electrolysers demonstrating new applications such as transport or remote area power systems with onsite hydrogen production and fuel cells/turbines replacing diesel generation, to drive the commercialisation for key component technologies

• projects or activities that support the implementation of the National Hydrogen Strategy

• projects that demonstrate or address issues with the use of hydrogen in industrial processes currently using fossil fuels (e.g. hydrogen as a fuel in boilers, kilns or other process heating applications, hydrogen as a reducing agent in steel manufacture)

• subject to positive outcomes in financial and regulatory studies, QEM intends to seek financial support from the ARENA fund

• Source ARENA website

Appendix – C

Vanadium Market

113 VRFB Installs Worldwide

27

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

Construction

• Vanadium plays an essential role as an alloy of steel to provide increased tensile strength, durability and weather resistance.
• Announced in February 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/media-centre/press-releases/2020/Global-crudesteel-output-increases-by-3.4--in-2019.html

Australian Steel Industry

• ~5.3Mt of steel are produced in Australia annually. Australian Bureau of Statistics 2017-18.
• ~100,000 people employed in the Australian steel industry
• Australia exports ~800,000 tonnes a year.
• Australian steel industry generates $29 billion in annual revenue and is an essential part of the Australian economy.
• The Government of India is aiming to scale up steel production in the country to 300 MT by 2025 from about 90 MT in 2015-16.

Aerospace & Automotive

• 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
• 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)

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.
• 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.
• COVID-19 has further exposed Australia's lack of resilience in this area.
• 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.