SUREFIRE RESOURCES NL — Interim / Quarterly Report 2017

Jan 30, 2017

Quarterly Report

for the three months ended 31 Dec 2016

Surefire Resources NL

Surefire is an exploration company with assets in Western Australia.

Surefire will focus on a rigoured approach around project development through the application of the companies study management experience. Surefire believes that Australia still offers an extraordinary opportunity for resource development and will continue to seek and develop projects.

ASX Code: SRN ACN: 083 274 024

Registered Office

c/ Ground Floor 63 Hay Street Subiaco WA 6008

t: +61 (8) 9 382 8822

www.surefireresources.com.au

Capital Structure

1,972,640,813 ordinary shares

Board Members

Graeme Smith Chairman – Non Executive Don Valentino

Executive Director

Brett Clark

Non-Executive Director

Graeme Smith Company Secretary

Summary & Highlights

OPERATIONAL HIGHLIGHTS

Kooline Silver Lead Project Option

• Option agreement entered into, to acquire the Kooline Silver-Copper-Lead Project.
• Multiple high grade rock chip results returned from initial reconnaissance at Kooline

Sample No	Silverg/t	Lead %
BKCR0002	170	49.3
BKCR0011	105	27.5
BKCR0012	60	51.7
BKCR0013	215	56.4
BKCR0014	150	48.0
BKCR0015	95	26.8
BKCR0016	110	25.2
BKCR0017	135	49.8
BKCR0018	215	60.7
BKCR0019	100	39.0
BKCR0020	365	25.1
BKCR0022	145	53.0
BKCR0024	25	21.1

• Two mineralised corridors with a strike length of 4.5km identified
• Drill ready targets drilling program design and schedule imminent
• Additional targets extend beneath recent sediments

CORPORATE HIGHLIGHTS

• Capital Raising of $500,000 through a placement of 250 million shares to sophisticated and professional investors.

EXPLORATION ACTIVITIES

Kooline Project

During the Quarter the Company commenced field activities and supporting activities on the Kooline Silver-

Copper-Lead Project ("the Project") (ASX Release: 2 November 2016).

The Project, located 55km south of the Paulsen's Gold Mine, within the Ashburton Province, produced a total of 3,600t of lead and 950kg (30,546oz) of silver over an eleven-year period (1948 and 1959). Much of the historical production came from three mines: The Gift, Jane-Audrey and Bilrose, which lie within the tenure. Many of the old workings at Kooline have demonstrated untested potential extensions both along strike and down dip. Thus, many prospects are drill-ready.

The Project includes an extensive 6km long auger soil geochemical anomaly, and is characterised by numerous high grade silver (up to 19oz/t Ag) and lead occurrences (10 – 70% galena) with historical workings distributed over a 5km length within the tenure.

Since announcing the Kooline option agreement, the Company has:

• Sourced all available geophysical datasets, including high resolution aeromagnetic and ground IP;
• Appointed a consultant geophysicist to reprocess and re-evaluate the datasets; and,
• Collated the limited historical drilling, geology and geochemistry into a relational database for review by BRD's technical consultants.

The Companyhas moved quickly to validate the legacy information and to generate new drill ready targets by considering the holistic nature of the technical information within a more evolved structural framework.

Project Geology

The Project geology has only been partially mapped by prior explorers and has been interpreted as being dominated by the Ashburton Formation and Quaternary cover consisting of laterite, colluvium and alluvium associated with relict and erosional regolith domains.

Within the Project area, the Ashburton Formation is predominantly siltstone, thin to very thick bedded lithic quartz sandstone and minor pebble conglomerate to greywacke. No felsic volcanic lithologies have

been noted within the Project area to date. This lithology has been metamorphosed to lower greenschist facies.

The structural complexity and implications with respect to mineralisation at Kooline is poorly understood. Structural mapping has confirmed multiple deformation events. Rodding or pencil slate caused by the intersection of cleavage planes was confirmed in both the June Audrey and Bilrose Prospect areas. Preliminary structural data from field reconnaissance suggests that gold, lead and silver mineralisation is bound within potential multiple, subtle dilation zones associated with common intersection lineation environment.

A field trip to the tenements yielded twenty-four rock chip samples across a wide area. Seven samples returned lead assays in excess of 40% lead. Ten samples produced assays over 3oz per tonne silver, and two samples assayed at greater than 1% copper. (ASX Release: 17 January 2017)

The resulting assays confirm the widespread occurrence of high grade silver and lead values in mineralised structures that crop out over a minimum 4.5km of strike at Kooline. The west-northwest trending mineralised structures are buried in the west by sediments associated with the Ashburton River floodplain.

CORPORATE

Capital Raising

During the Quarter the Company raised $500,000 from the issue of 250 million shares to sophisticated and professional investors.

The company also announced that shareholder approval for the issue of 430 million quoted options would be sought at a general meeting on February 9 2017.

Future Activities

Whilst at a very early stage, the company has commenced evaluation of another base metals project. Negotiations on this project are incomplete and further information is an exception to LR 3.1.

A program of works has been prepared for drilling at Kooline and regulatory approvals are being sought.

Schedule of Tenements

Project	Tenement Details	Interest
Western AustraliaUnaly Hill	E57/420	100%

Competent Persons Statement:

The information in this announcement that relates to the Kooline Project Exploration Results is based on information compiled and fairly represented by Mr Jonathan King, who is a Member of the Australian Institute of Geoscientists and a consultant to Surefire Resources NL. Mr King has sufficient experience relevant to the style of mineralisation and type of deposit under consideration, and to the activity which he has undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr King consents to the inclusion in this report of the matters based on this information in the form and context in which it appears.

For further information: Graeme Smith gsmith@surefireresources.com.au +61 8 9 382 8822

Don Valentino don@surefireresources.com.au +61 419 217943

Table 1: Rock Chip Sampling Results

Sample	Easting	Northing	Pb %	Ag ppm	Cu %	Au ppm	Fe %	Mn %	S %
BKCR001	445,348	7,442,451	3.35	25	0.02	0.16	1.84	0.03	0.3
BKCR002	445,424	7,442,404	49.3	170	0.16	0.19	1.12	0.01	4.3
BKCR003	445,066	7,442,580	3.59	1	0.07	0.28	2.41	1.01	0.1
BKCR004	445,065	7,442,570	5.97	25	1.50	0.28	1.69	0.19	0.1
BKCR005	444,966	7,442,634	4.33	1	0.11	0.12	1.89	0.02	0.1
BKCR006	444,940	7,442,645	3.11	30	0.38	0.12	1.85	0.08	0.1
BKCR007	444,762	7,442,711	0.277	1	0.40	0.1	2.41	0.02	0.1
BKCR008	444,730	7,442,729	0.11	1	1.88	0.03	2.2	0.01	0.1
BKCR009	444,730	7,442,729	37	80	0.19	0.13	2.18	0.14	2.9
BKCR010	442,543	7,443,555	1.99	1	0.03	0.04	2.04	0.01	0.1
BKCR011	442,066	7,443,727	27.5	105	0.49	0.18	1.49	0.01	0.5
BKCR012	443,582	7,443,334	51.7	60	0.08	0.06	1.89	0.02	5.9
BKCR013	443,565	7,443,562	56.4	215	0.34	0.1	1.09	0.01	6.0
BKCR014	443,630	7,443,821	48	150	0.05	0.07	1.32	0.01	6.0
BKCR015	443,591	7,443,847	26.8	95	0.26	0.35	1.96	0.02	0.8
BKCR016	443,801	7,443,749	25.2	110	0.02	0.42	1.3	0.01	4.2
BKCR017	446,185	7,443,015	49.8	135	0.02	0.04	2.13	0.02	6.2
BKCR018	446,177	7,443,678	60.7	215	0.16	0.06	1.03	0.04	9.1
BKCR019	445,108	7,443,553	39	100	0.02	0.09	3.31	0.03	4.3
BKCR020	444,565	7,443,540	25.1	365	0.14	0.15	0.872	0.01	9.7
BKCR021	443,908	7,444,162	7.13	25	0.01	0.04	2.63	0.02	0.7
BKCR022	444,137	7,444,086	53	145	0.01	0.09	2.43	0.02	5.9
BKCR023	445,350	7,444,060	16.6	45	0.01	0.2	1.62	0.04	3.3
BKCR024	445,294	7,443,869	21.1	25	0.02	0.02	1.44	0.02	0.8

Released - ASX January 17 2017

+Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

Name of entity

SUREFIRE RESOURCES NL

ABN Quarter ended ("current quarter")

48 083 274 024 31 December 2016

	Consolidated statement of cash flows	Current quarter$A'000	Year to date(6 months)$A'000
1.	Cash flows from operating activities
1.1	Receipts from customers
1.2	Payments for
	(a)exploration & evaluation	(53)	(125)
	(b)development
	(c)production
	(d)staff costs
	(e)administration and corporate costs	(25)	(82)
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	Research and development refunds		60
1.8	Other (provide details if material)
1.9	Net cash from / (used in) operatingactivities	(78)	(147)

2.	Cash flows from investing activities
2.1	Payments to acquire:
	(a)property, plant and equipment
	(b)tenements (see item 10)
	(c)investments
	(d)other non-current assets

• See chapter 19 for defined terms

1 September 2016 Page 1

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

	Consolidated statement of cash flows	Current quarter$A'000	Year to date(6 months)$A'000
2.2	Proceeds from the disposal of:
	(a)property, plant and equipment
	(b)tenements (see item 10)
	(c)investments
	(d)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) investingactivities

3.	Cash flows from financing activities
3.1	Proceeds from issues of shares	500	500
3.2	Proceeds from issue of convertible notes
3.3	Proceeds from exercise of share options
3.4	Transaction costs related to issues ofshares, convertible notes or options	(24)	(24)
3.5	Proceeds from borrowings
3.6	Repayment of borrowings
3.7	Transaction costs related to loans andborrowings
3.8	Dividends paid
3.9	Other (provide details if material)
3.10	Net cash from / (used in) financingactivities	476	476

4.	Net increase / (decrease) in cash andcash equivalents for the period
4.1	Cash and cash equivalents at beginning ofperiod	79	148
4.2	Net cash from / (used in) operatingactivities (item 1.9 above)	(78)	(147)
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)	476	476
4.5	Effect of movement in exchange rates oncash held
4.6	Cash and cash equivalents at end ofperiod	477	477

• See chapter 19 for defined terms

1 September 2016 Page 2

Mining exploration entity and oil and gas exploration entity quarterly report

5.	Reconciliation of cash and cashequivalentsat the end of the quarter (as shown in theconsolidated statement of cash flows) to therelated items in the accounts	Current quarter$A'000	Previous quarter$A'000
5.1	Bank balances	70	79
5.2	Call deposits	407
5.3	Bank overdrafts
5.4	Other (provide details)
5.5	Cash and cash equivalents at end ofquarter (should equal item 4.6 above)	477	79

6. Payments to directors of the entity and their associates Current quarter

• 6.1 Aggregate amount of payments to these parties included in item 1.2 22
• 6.2 Aggregate amount of cash flow from loans to these parties included in item 2.3
• 6.3 Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2

Director fees

7. Payments to related entities of the entity and their associates

• 7.1 Aggregate amount of payments to these parties included in item 1.2
• 7.2 Aggregate amount of cash flow from loans to these parties included in item 2.3
• 7.3 Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2

$A'000

Appendix 5B

8.Financing facilities availableAdd notes as necessary for anunderstanding of the position	Total facility amountat quarter end$A'000	Amount drawn atquarter end$A'000
8.1Loan facilities	100	74

• 8.2 Credit standby arrangements
• 8.3 Other (please specify)
• 8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.

Loan from V Nikolaenko – unsecured, interest 10%pa

9.	Estimated cash outflows for next quarter	$A'000
9.1	Exploration and evaluation	200
9.2	Development
9.3	Production
9.4	Staff costs
9.5	Administration and corporate costs	50
9.6	Other (provide details if material)
9.7	Total estimated cash outflows	250

10.	Changes intenements(items 2.1(b) and2.2(b) above)	Tenementreferenceandlocation	Nature of interest	Interest atbeginningof quarter	Interestat end ofquarter
10.1	Interests in miningtenements andpetroleum tenementslapsed, relinquishedor reduced
10.2	Interests in miningtenements andpetroleum tenementsacquired or increased

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.

(Company secretary)

Sign here: ............................................................ Date: ...31 January 2017........

Print name: .........Graeme Smith................................................

Notes

• 1. The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.
• 1. If this quarterly 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 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.
• 1. 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.