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ROX RESOURCES LIMITED Investor Presentation 2019

Mar 20, 2019

65741_rns_2019-03-20_ae6ad56c-0753-4247-a690-4c351c354863.pdf

Investor Presentation

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ASX: RXL

Rox Resources

Battery Metals Conference Presentation

21 March 2019

ASX: RXL www.roxresources.com.au

Alex Passmore Chief Executive Officer

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Disclaimers
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Forward-Looking Statements

This presentation has been prepared by Rox Resources Limited. This document contains background information about Rox Resources Limited current at the date of this presentation. The presentation is in summary form and does not purport be all inclusive or complete. Recipients should conduct their own investigations and perform their own analysis in order to satisfy themselves as to the accuracy and completeness of the information, statements and opinions contained in this presentation.

This presentation is for information purposes only. Neither this presentation nor the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of shares in any jurisdiction.

This presentation may not be distributed in any jurisdiction except in accordance with the legal requirements applicable in such jurisdiction. Recipients should inform themselves of the restrictions that apply in their own jurisdiction. A failure to do so may result in a violation of securities laws in such jurisdiction.

Competent Person Statements

Exploration Results

The information in this report that relates to previous Exploration Results, was either prepared and first disclosed under the JORC Code 2004 or under the JORC Code 2012 and has been properly and extensively cross-referenced in the text to the date of original announcement to ASX. In the case of the 2004 JORC Code Exploration Results and Mineral Resources, they have not been updated to comply with the JORC

Resource Statements

The information in this report that relates to nickel Mineral Resources for the Fisher East project was reported to the ASX on 5 February 2016 (JORC 2012). Rox confirms that it is not aware of any new information or data that materially affects the information included in the announcement of 5 February 2016, and that all material assumptions and technical parameters underpinning the estimates in the announcement of 5 February 2016 continue to apply and have not materially changed.

This presentation does not constitute investment advice and has been prepared without taking into account the recipient's investment objectives, financial circumstances or particular needs and the opinions and recommendations in this presentation are not intended to represent recommendations of particular investments to particular persons. Recipients should seek professional advice when deciding if an investment is appropriate. All securities transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments.

To the fullest extent permitted by law, Rox Resources Limited, its officers, employees, agents and advisers do not make any representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of any information, statements, opinions, estimates, forecasts or other representations contained in this presentation. No responsibility for any errors or omissions from this presentation arising out of negligence or otherwise is accepted.

The information in this report that relates to nickel Mineral Resources for the Collurabbie project was reported to the ASX on 18 August 2017 (JORC 2012). Rox confirms that it is not aware of any new information or data that materially affects the information included in the announcement of 18 August 2017, and that all material assumptions and technical parameters underpinning the estimates in the announcement of 18 August 2017 continue to apply and have not materially changed.

The information in this report that relates to gold Mineral Resources for the Mt Fisher project was reported to the ASX on 11 July 2018 (JORC 2012). Rox confirms that it is not aware of any new information or data that materially affects the information included in the announcement of 28 March 2018, and that all material assumptions and technical parameters underpinning the estimates in the announcement of 28 March 2018 continue to apply and have not materially changed.

This presentation may include forward-looking statements. Forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions which are outside the control of Rox Resources Limited. Actual values, results or events may be materially different to those expressed or implied in this presentation. Given these uncertainties, recipients are cautioned not to place reliance on forward looking statements. Any forward looking statements in this presentation speak only at the date of issue of this presentation. Subject to any continuing obligations under applicable law and the ASX Listing Rules, Rox Resources Limited does not undertake any obligation to update or revise any information or any of the forward looking statements in this presentation or any changes in events, conditions or circumstances on which any such forward looking statement is based.

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Disclaimers
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Cautionary Statement – Scoping Study Parameters

The updated Scoping Study released to the ASX on the 10[th] of October 2018 is based on low-level technical and economic assessments, and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the updated Scoping Study will be realised.

The updated Scoping Study and the production targets derived from the updated Scoping Study are preliminary in nature as the conclusions are drawn on Inferred Mineral Resources (12%) and Indicated Mineral Resources (88%).

The Indicated Mineral Resources and Inferred Mineral Resources underpinning the conclusions from the updated Scoping Study, including the production targets, have been prepared by a competent person in accordance with the requirements of JORC Code 2012 Edition. This announcement does not include an estimate of Ore Reserves as the supporting modifying factors have not been determined to a sufficient level of confidence.

Some (12%) of the Mineral Resources used in the study are Inferred Mineral Resources. When subset to the Resources in the Mining Plan there are only 4.2% Inferred Resources. There is a lower level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the predictions of expected costs or production rates contained herein, and the production targets themselves, will be realised.

Unless otherwise stated all financial figures are in Australian dollars, are undiscounted and are not subject to inflation or escalation factors. All years are calendar years.

At this stage no toll milling agreement has been negotiated and there is no certainty that an acceptable toll milling agreement can be negotiated.

The forward nickel price and exchange rate assumptions in this report are based on a careful consideration of market forecasts and consensus by a number of third parties. There is no guarantee that this nickel price or exchange rate will be realised.

The Company has concluded that there is a reasonable basis for providing the forward-looking statements included in this report and detailed reasons for that conclusion are contained herein. The Company cautions though that there is no certainty that the forecast financial information or production targets will be realised. Material assumptions underpinning the production target and forecast financial information derived from the production targets are set out in this announcement.

The Study referred to in this announcement is a technical and economic investigation of the viability of the Fisher East Project. It is based on low accuracy technical and economic assessments, (+/- 35% accuracy) and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Study will be realised. The Production Target referred to in this presentation is based on JORC Resources which are approximately 96% Indicated and 4% Inferred. The mine plan has been generated using stope optimisation and averaging of grades over multiple year periods prior to the application of mining dilution. To achieve the outcomes indicated in this study initial funding in the order of A$48 to A$87 million is likely to be required. Investors should note that there is no certainty that Rox will be able to raise funding when needed. It is also possible funding may only be available on terms that may be dilutive to or otherwise effect the value of Rox’s shares.

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Highlights
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New management, new energy, focus, and strategy

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Rox is a junior exploration and development company that has a strong history of exploring for, and discovering, base metal and gold deposits

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The company has traded mineral assets when these have not met the strategic imperatives of the company or when a divestment represented an exceptionally strong return

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The Rox team has a strong technical background and the recent addition of new CEO (Alex Passmore) adds market knowledge and project generation capacity Rox’s Fisher East nickel project to be monetised:

JV / Development Asset Sale options also being considered

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Well funded with $11.6m cash and receivables

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Corporate Information
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Capital Structure Capital Structure
ASX Code: RXL
Shares on Issue: 1,259M
Share Price: A$0.009
Unlisted Options: 65.8M
Market Capitalisation: $11.3M
Cash & Receivables* (at 31 Dec
2018):
$11.6M
Debt: Nil
Top 20: 21%

* A$3.75 million deferred payment from Teck for Reward sale, plus $0.4 million in held shares and $7.9 million in cash (as at 31 December 2018)

Board and Management Board and Management
Chairman Stephen Dennis
Managing Director (retiring) Ian Mullholland
Finance Director Brett Dickson
Chief Executive Officer Alex Passmore
Exploration Manager Will Belbin

Rox Share Price, Last 12 Months

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$0.020 40,000,000
Volume
$0.015 30,000,000
$0.010 20,000,000
$0.005 10,000,000
$0.000 -
Volume
Share Price
Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19
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Lack of market liquidity and market recognition for RXL H2 CY2018 was characterised by broader market weakness Trading below cash and receivables on low volumes. Has suffered from a lack of news flow and market apathy Management very aware of the value disconnect

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Nickel Market Deficit
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Nickel market deficit
Nickel Market Balance & Stocks
emerged in 2016 and is
300 600 expected to continue for
224.7 180.0
sometime
200 400
122.9 131.4 Nickel used in battery
100 200
52.9 end uses to grow rapidly
0 0 (estimates of 40%
CAGR)
-52.2
-100 -200
-112.0 -119.5 -116.4 Currently 70% nickel
-200 -400
supply is used in
-209.5 stainless with battery
-300 -600
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 usage increasing from
4% of total demand
Market Balance (kt) LME/SHFE Stocks
LME Stocks (kt Ni)
Market Balance (kt Ni)
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After Deutsche Bank, July 2018

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Nickel Price Observations
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Nickel price has started to edge upwards in Q1 CY2019

Prices only just rebounding of the cost curve

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However this is a muted response given:

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Rapidly declining stocks in LME warehouse

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Price is not far above cash cost level for the best performing ¾ of the sector

75[th] Percentile Line

  • 25[th] Percentile Line

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At 2015 price levels 75% of the industry was cash negative No incentive for capital investment

Source: adapted from SP Global

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Rox’s Nickel Projects
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High Grade Nickel Sulphide Resources in WA 4.8 Mt @ 2.0% Ni; 91,000t Ni* WA is a stable and reliable jurisdiction Amongst the highest grade Ni in WA

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*See Appendix for resource details

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Rox’s Nickel Projects
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Two exceptional high grade nickel sulphide resources in WA’s northern goldfields 70km apart

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150km from established infrastructure

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Fisher East Nickel Conceptual Plan
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Updated Scoping Study1 based on new Conceptual Mining Study by CSA – stope optimisations, detailed mine schedule – optimum mining rate was 500 ktpa Other parameters same as previous Scoping Study in 20152 Two possible cases examined: Build a concentrator on site (Concentrator Case) Truck ore to nearby plant (Toll Mill Case) Resources in Mining Plan of 2.9Mt @ 1.7% Ni are ~96% Indicated Next stage is to expand resource and then undertake pre-feasibility level work

1 ASX:RXL 10 October 2018; 2 ASX:RXL 17 February 2015

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Scoping Study Delivers
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Concentrator Toll Mill See Appendix for source data
Please refer Scoping Study
announcement dated 10 October
2018.
Please note Cautionary
Statements regarding Scoping
Studies and the Cautionary
Statement regarding Forward
Looking Statements on slides 2 &
3.
Estimate is accurate to ±35%
The Company is not aware of any
new information that materially
affects the information included in
the relevant announcement.
Mining Inventory 2.9Mt @ 1.7% Ni 2.9Mt @ 1.7% Ni
Mine Life 6 years 6 years
Annual Production 7,300t Ni in conc 7,300t Ni in conc
Pre-Production Capital A$87m A$48m
Operating Cash Costs US$3.14/lb US$3.42/lb
All In Sustaining Costs US$3.57/lb US$3.83/lb
Net Cash Flow A$146.5m A$102.3m
NPV A$79.2 A$58.2
IRR 44% 55%

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Fisher East Resources
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Total Mineral Resource of 4.2 Mt @ 1.9% Ni , for 78,000 tonnes Ni metal* Potential to increase current resources and to identify new resources

* See Appendix for Mineral Resource details

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Mine Layout
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Three deposits are along a 2km strike

Shared decline for Musket/ Cannonball

Camelwood has its own decline

Spiral declines

Standard underground mining technique - sublevel stoping with paste fill

15 m sublevels, with 3.0m x 3.0m mineralised development profiles

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Mine Schedule & Design
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Years 1 and 2 are most capital intensive Depth and side extensions at Musket to be drilled Depth extensions at Camelwood also to be drilled Current 6 year mine life could be extended to 9 years with extra drilling

Rox projects do not have Ore Reserves. The Mineral Resources in Rox’s Resources in the Mining Plan are ~96% Indicated. See Appendix for source data.

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Mine Schedule & Design
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Production Profile
600 2.50
Tonnes Milled Grade
500
2.00
400
1.50
300
1.00
200
0.50
100
- -
1 2 3 4 5 6 7 8
Year
Grade Ni%
Tonnes Milled (kt)
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Rox projects do not have Ore Reserves. The Mineral Resources in Rox’s Resources in the Mining Plan are ~96% Indicated. See Appendix for source data.

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Processing & Logistics
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Simple process flow sheet and logistics

Metallurgical recoveries, 80 – 99%, and saleable concentrate grades, 10 - 14% Ni, acceptable Fe:MgO ratios, low As (no penalties)

Overall metallurgical recovery of 88% at concentrate grade of 13% Ni assumed

500,000 tpa milling rate Concentrator on site Capex $87m Toll Mill Capex $48m

Either truck concentrate to Esperance (900km), or truck ore to Leinster (200km)

Baseline environmental studies complete

Increased resources will increase mine life and project value

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Cost Estimates
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Operating Costs Concentrator Concentrator Toll Mill Case Toll Mill Case Metric (pre-tax) Unit Concentrator Toll Mill
Case (A$/lb) Case (US$/lb) (A$/lb) (US$/lb) Case Case
Mining & Development Cost
Transport Cost
2.25
0.63
1.69
0.47
2.25
1.19
1.69
0.89
Pre-tax Cash
Flow
A$M ~A$146m ~A$102m
Processing Cost 1.16 0.87 1.04 0.78 Pre-tax NPV A$M ~A$79m ~A$58m
G & A 0.15 0.11 0.07 0.06 IRR % ~44% ~55%
C1 Cash Cost (rounded) 4.20 3.15 4.60 3.45 Capital Payback
Period
Years ~2.3 Years 1.8 Years
WA State Royalty 0.17 0.13 0.16 0.12
Total Cash Costs 4.37 3.27 4.72 3.54
Sustaining Capital 0.39 0.29 0.38 0.29
All in Sustaining Cost(rounded) 4.80 3.60 5.10 3.83
Capital item Concentrator Case Toll Mill Case (A$M) Financial Assumption $/t $/lb
(A$M) Nickel Price US$ US$16,500/t US$7.50/lb
Mining Capital
Process Plant & Infrastructure
29
58
29
19
Nickel Price A$ A$22,000/t A$10.00/lb
Pre-Production Capital 87 48 Exchange Rate A$/US$ 0.75 0.75
Post-Production Capital 38 37
TOTAL 125 85 See Appendix for source data 1

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Resource Extensions
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Mineralisation not in Resource
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Exploration of several targets along 25km of strike Economic thicknesses and grades of Ni intersected at Sabre Fresh sulphides >1.5% Ni in RC at Mt Tate 0.6% Ni intersected at Sholl Range Over 40km of strike to explore

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Collurabbie
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167 km2 of prospective tenure Main discovery at Olympia deposit Only 70km from Fisher East Widespread Ni-Cu-PGE mineralisation over ~15km strike length on multiple stratigraphic horizons

Underdone previous exploration Extensive and quality datasets of drilling and geophysics Drill targets for Ni-Cu-PGE and Au Counter-cyclical high quality acquisition at a relatively cheap* price

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  • $25,000 cash + 7.5 million RXL shares (~$150K)

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Exploration Potential
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Olympia Mineral Resource of 573,000 tonnes @ 1.6% Ni, 1.2% Cu, 0.08% Co and 2.3 g/t Pt+Pd, 2.3% NiEq High grade drill intercepts Open at depth* Exploration potential over 15km of strike First pass metallurgical test work underway!

* See Appendix for Mineral Resource details

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Key Points
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Impressive Fisher East Scoping Study Outcomes Both Concentrator and Toll Cases are very attractive – and Upside Case is very achievable Large shallow mineral systems (over 10km in strike length, open at 700m depth, sulphides at 60m depth) Straight forward underground mining & processing Excellent metallurgy and concentrate specs Rox is aiming to monetise the Fisher East nickel project in the coming 12 months -> JV, development, divestment or a combination thereof

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Thank You

Rox Resources Limited Level 1, 34 Colin Street, West Perth, WA, 6005 AUSTRALIA T: (08) 9226 0044 F: (08) 9322 6254 E: [email protected] W: www.roxresources.com.au

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Appendix - Study Outcomes
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See RXL announcement 10 October 2018

Capital Costs Concentrator Case Toll Case
Mining Inventory 2.9Mt @ 1.7% Ni 2.9Mt @ 1.7% Ni
Pre-Production Capital A$87.0m A$48.0m
Sustaining Capital A$37.9m A$37.0m
Life of Mine 6.0 years 6.0 years
Processing Rate 500ktpa 500ktpa
Nickel in concentrate - LOM 44,100t 44,100t
Nickel in concentrate - Annual 7,300tpa 7,300tpa
Nickel Price US$7.50/lb US$7.50/lb
Exchange Rate (AUD:US) 0.75 0.75
Revenue A$678.5m A$630.0m
C1 Cash Costs A$4.19/lb (US$3.14/lb) A$4.56/lb (US$3.42/lb)
All in Sustaining Costs A$4.76/lb (US$3.57/lb) A$5.10/lb (US$3.83/lb)
EBITDA A$271.3m A$187.4m
Net Cash Flow (pre-tax) A$146.5m A$102.3m
Pre-tax NPV (10%) A$79.2m A$58.2m
IRR 44% 55%
Payback 2.25 years 1.8 years

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Appendix – Mineral Resources
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Fisher East Nickel, ASX:RXL 5 February 2016

Deposit Category Tonnes (Mt) Ni% Ni (kt)
Camelwood Indicated 1.7 2.0 34.0
Inferred 0.3 1.5 5.0
Total 2.0 1.9 39.0
Cannonball Indicated 0.24 2.9 7.0
Inferred 0.02 1.9 0.3
Total 0.26 2.8 7.3
Musket Indicated 1.8 1.7 30.0
Inferred 0.1 1.5 1.5
Total 1.9 1.7 31.6
TOTAL Indicated 3.7 1.9 71.0
Inferred 0.5 1.5 7.0
Total 4.1 1.9 78.0

Olympia Nickel-Copper-PGE, ASX:RXL 18 August 2017

Tonnes
(kt)
Ni % Cu % Co ppm **Pd ppm ** **Pt ppm ** *NiEq % ** NiEq (kt) Pd+Pt
(koz)
573 1.6 1.2 820 1.5 0.85 2.2 13.5 43.0

Olympia: 1.0% Ni block cut-off grade. Values may not sum due to rounding.

Information provided as required by section 50 of the JORC Code 2012

*NiEq = (Ni grade x Ni price x Ni recovery + Cu grade x Cu price x Cu recovery) / (Ni price x Ni recovery) Where Ni price = US$13,000/t, Cu price = US$6,300/t (as of 10 October 2018) Ni recovery = 85%, Cu recovery = 85%

Metallurgical recoveries based on results from deposits with similar mineralogy, e.g. Savannah (83% recovery for both Ni and Cu), and Nova (88% recovery for both Ni and Cu). In general, the metallurgical recoveries of nickel and copper are similar, so the factors cancel each other out in the metal equivalent calculation. In addition, metallurgical recoveries at the Fisher East project average 88% for nickel. It is the Company’s reasonable opinion that all metals in the metal equivalent will be able to be recovered and sold, as they are at Savannah and Nova.

Fisher East: 1.0% Ni block cut-off grade. Values may not sum due to rounding.

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Appendix – Mineral Resources
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Mt Fisher Gold, ASX:RXL 11 July 2018

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0.8 g/tAu block cut-off grade. Values may not sum due to rounding.

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