TURNSTONE RESOURCES LTD — Investor Presentation 2018

Oct 16, 2018

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BUILDING EUROPE’S LARGEST POTASH INVENTORY in Germany’s South Harz Basin

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www.davenportresources.com.au
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DISCLAIMER

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Davenport Resources Limited (“Davenport”, “DAV”, “The Company”) has issued this Presentation for informational purposes only. It is not intended to, and does not, constitute specific advice to any particular party or person. The information in this presentation is based on publicly available information, internally developed data and other sources. Where any opinion is expressed in this presentation, it is based on the assumptions and limitations mentioned herein and is an expression of present opinion only. No warranties or representations can be made as to the origin, validity, or of the information. The disclaims and accuracy, completeness, currency reliability Company excludes all liability (to the extent permitted by law) for losses, claims, damages, demands, costs and expenses of whatever nature arising in any way out of or in connection with the information, its accuracy, completeness or by reason of reliance by any person on any of it.

Certain statements in this presentation are forward looking statements. By their nature, forward looking statements involve a number of risks, uncertainties or assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward looking statements. These risks, uncertainties or assumptions could have financial effects or adversely affect the outcome of the plans and events described herein. Forward looking statements contained in this presentation regarding past or present activities should not be taken as representation that such activities will continue in the future. You should not place undue reliance on forward looking statements, which apply only as of the date of this presentation. Actual outcomes and results may differ materially from those expressed or implied by these forward looking statements.

This Presentation is not intended to be, and is not, a prospectus, offering memorandum or private placement memorandum. The information in this Presentation may not be complete and may be changed, modified or amended at any time by the Company, and is not intended to, and does not, constitute representations and warranties of the Company, or its directors, officers, employees, agents, representatives and affiliates. It is not intended to be the basis of any investment decision or any other risk evaluation and should not be relied upon and may not be considered as a recommendation by the Company or any other person in connection with an investment in the Company.

COMPETENT PERSON STATEMENTS

The South Harz Potash Project data in this report is based on information reviewed by Jason Wilkinson, a member of the Professional Member of the Institute of Materials, Minerals & Mining (MIMMM) and an employee of Davenport Resources Limited. Mr Wilkinson has sufficient experience that is relevant to the style of the mineralisation and the type of deposit under consideration and to the activity to which he is undertaking, to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Wilkinson has consented to the inclusion of this information in the form and context in which it appears in this report.

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DAVENPORT AT A GLANCE

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Pat McManus: Chairman

A mining professional for more than 30 years, his work has taken him to many sites within Australia and overseas. Pat has worked in operational, technical and corporate roles for Rio RGC Limited and Bemax Resources Limited. He was a Tinto, founding director and, from January 2007 to March 2010, managing director of ASX-listed Corvette Resources Limited. Patrick McManus is the Managing Director of Parkway Minerals NL.

Rory Luff: NE Director

Founder of BW Equities and East Exploration with more than 15 years’ experience in financial services.

Chris Bain: Executive Director

A geologist with 40 years’ of experience in mining, exploration, funds management, stockbroking and corporate advisory roles.

Dr Chris Gilchrist: Managing Director

A Mineral Engineer with more than 30 years’ of experience including; General Manager and Operations Director for Cleveland Potash Limited (UK), Non-Executive Director of South Boulder Mines (now Danakali Ltd) managing feasibility on the Colluli potash project in Eritrea. More recently as Project Manager and adviser to Circum Minerals on their Ethiopian potash project.

Jason Wilkinson: Project Director A geologist with 25 years’ of exploration experience including 7 years’ with Allana Potash and in country manager ICL in Ethiopia taking the project from start-up through to feasibility. Jason is based in Europe.

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DAVENPORT AT A GLANCE

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Large scale and high quality resource secured in Germany, close to end markets

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Strategic position built in
Germany’s South Harz potash
basin, a globally significant region
with a history of over 120 years of
potash production and close to
end markets.
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Three perpetual mining licences Historic resources are substantial
with historic high grade resources in size and high grade. They
in “next to be mined” parts of the provide the basis to fast track
potash basin. Very low holding exploration to a JORC resource as
costs and no royalty obligations. shown by successful Ebeleben
Resource conversion.
Large supporting database that
would cost over €100m to
replicate today.
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Davenport directors and management have significant experience in potash and other minerals in Western Europe, Australia, the Middle East and Africa, with skills in finance, geology, project development and staff are operations. Key based in Europe.

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GERMAN SOUTH HARZ REGION

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• Davenport owns three perpetual mining licences and two exploration licences

• covering 659 km[2] in the South Harz potash basin.

• This region represents the cradle of potash mining from where 181.7 Mt potash

• has been extracted since the 1890’s.

• Close proximity to end markets creates a highly competitive position

• Davenport is currently converting its historic resources (under the former GDR

• system) to JORC- compliant resources.

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STRATEGIC LICENCE POSITION

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• Davenport acquired perpetual mining licenses for Ebeleben, Mühlhausen and

• Ohmgebirge from the German government in 2018.

• Davenport is fast-tracking the confirmation of resources in these areas and expects this to become Europe’s largest unmined potash resource.

• In addition, Davenport already has exploration licenses for Küllstedt and

• Gräfentonna.

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- EBELEBEN PERPETUAL LICENCE JORC INFERRED RESOURCE

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• 2012 JORC Inferred Resource of 576 million tonnes at 12.1% K2O (69.3 Mt of K2O) which comprises 324 Mt sylvinite at 15.6% K2O and 253 Mt carnallitite at 7.5% K O. 2

• Extends from now closed Volkenroda mine to Davenport’s Gräfentonna Licence. Total mining licence area is 37 km[2] with 31 drill holes.

• Advanced planning for mine development. Shaft sinking began but did not proceed after German re-unification. Volkenroda mine closed in 1991 after 80 years of operation.

Key features of Ebeleben resource containing thick Sylvinite with grades similar to typical international operations.

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- MÜHLHAUSENPERPETUAL LICENCE KEULA AND NOHRA-ELENDE RESOURCE

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• JORC resource of 1.13 Billion tonnes containing 124.9 Mt K2O of mixed potash salts (ASX Announcement 16 October 2018) within Muhlhausen-Kuela sub-area

• Contains 834 Mt Sylvinite at a grade of 12.1 % K2O and 296 Mt Carnallitite containing 8.2 % K2O. The Sylvinite is contained within a mixed chloride-sulphate matrix known as “Hartsalz”.

• Hartsalz contains potassium chloride for MOP production but also potassium and magnesium sulphates for production of multi-nutrient fertilizers.

• Conversion of Historic resource to JORC Inferred resource ongoing for NohraElende sub-area, expected shortly.

Mühlhausen-Nohra Licence showing existing drillholes

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MÜHLHAUSEN-KEULA GRADE DISTRIBUTION

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• Modelling has determined that the average Sylvinite grade is 12.1% K2O however areas with grades in excess of 20% K2O have been identified.

K2O Grade (%)

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MÜHLHAUSEN-KEULA SYLVINITE THICKNESS

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• Average thickness of Sylvinite in the southern end of the licence area is 8m-10m with zones in excess of 15m in places.

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• OHMGEBIRGE PERPETUAL LICENCE HISTORIC RESOURCE

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• Historic resource containing 149.1 Mt at 13.5% K2O containing 20.1 Mt K2O (ASX announcement 19[th] June 2018)

• • 14 holes were drilled in this area by former state potash company, the most recent in 1984

• • Orebody borders former Bischofferode mine which yielded 60.8 Mt salts during 1902-1991

• • Potash is relatively shallow (700m).

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TOTAL JORC INFERRED RESOURCES OCTOBER 2018

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• Total JORC Inferred resource has reached over 1.7 Billion tonnes containing 194.2 Mt K2O. Further resources are still to be declared, bringing Davenport towards the biggest potash resource in Europe.

HORIZON	TONNAGE(MT)	K2O %	K2O (MT)
EBELEBEN
Sylvinite	324.0	15.6	50.4
Carnallitite	252.6	7.5	18.9
MUHLHAUSEN-KUELA
Sylvinite	834.3	12.1	100.7
Carnallitite	295.8	8.2	24.2
TOTAL JORC INFERRED	1,706.7	11.4	194.2

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EXPLORATION TARGETS KULLSTEDT AND GRAFENTONNA

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• Küllstedt – Exploration Target

• 4.055 - 5.141 billion metric tonnes grading 7.2% - 25% K2O*. Davenport (DAV ASX

• Listing Prospectus 24 October 2016)

• Gräfentonna – Exploration Target 2.678 - 3.396 billion metric tonnes grading 4.3%

• 25% K2O*. (ASX release 22 May 2017)

* The potential quantity and grade of the Exploration Target is conceptual in nature. There has been insufficient exploration to estimate a mineral resource and it is uncertain if further exploration will result in the estimation of a mineral resource

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COMPARATIVE ANALYSIS

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Company	Davenport	Danakali	Sirius Minerals	Highfield Resources
Ticker Mkt Cap (US$ millions) Cash (US$ millions) Debt (US$ millions) Enterprise Value (US$ millions) (mkt Cap - cash + debt)	DAV.ASX $6.2 $1.7 - $4.5	DNK.ASX $149 $10.4 - $139.9	SXX.LN $2,209 $512 $337 $2,035	HFR.ASX $180.1 $43.4 - $136.7
EV / Attributable K2O Resource (US$ millions)	$0.03	$0.49	$3.18	$1.30
Project Location Interest Attributable Resources (Mt) Measured + Indicated (Mt) Inferred (Mt) Total (Mt)	South Harz Germany 100%
	SYLVINITE ONLY 1,158 @13% K2O 1,158 @13% K2O

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COMPARATIVE ANALYSIS - EV per attributable K2O Resource US$/t

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3.5
3.0 • Davenport expects the size, quality and prime location of its assets in Germany
will soon place the Company in a favourable position alongside its peers.
2.5
2.0
1.5
1.0
0.5
-
Sirius Highfield Danakali Kore Davenport
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ROLE OF POTASH AS A PLANT NUTRIENT

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Potassium: One of the Three Primary Nutrients
Nitrogen (N) Phosphate (P) Potash (K)
▪ ▪ ▪
Promotes protein formation Plays a key role in adequate root Improves plant durability and
▪ development and photosynthesis resistance to drought, disease, weeds,
Determines plant’s growth, vigour,
process parasites and cold weather
colour and yield
▪
Helps plant resist drought
Each nutrient plays its own role, but only together do they ensure a balanced nourishment and cannot replace each other.
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POTASH MARKET

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• Potash is an essential fertilizer for plant growth. It improves water retention, strengthens roots and stems and assists nutrient transfer.

• World population is expected to grow to almost 10 billion by 2050 (+33%). Together with changing dietary trends, a 60% increase in agricultural output is required by then.

• Current potash market is slowly emerging from a period of oversupply with demand growing at around 3% a year. It is expected to exceed 67 million tonnes this year. MOP contract prices in 2018 are expected to exceed US$250 per tonne, however spot prices of US$315 and US$290 per tonne are being achieved in Brazil and SE Asia respectively.

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POTASH MARKET

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• As global population increases, the available arable land per capita will continue to decrease.

• • Potash demand and prices are rising and the trend is forecast to continue.

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FAST TRACK EVALUATION IS UNDERWAY

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114 €
Total of 114 drill holes within the Using today’s costs this equates Massive JORC compliant Inferred An exceptional starting point to
mining licences, 89 exclusively for to at least €100 million worth of resources already confirmed (> 1.7 Bt) fast track evaluation with the aim
potash with an additional 25 potash exploration data, with more to follow. In many places, of continuing potash production
petroleum and geo-stratigraphic including evaluation, geochemical the resource is thick, high-grade and in the South Harz region which is
drill holes that penetrated the & mineralogical information. clean. There is also high potential for still ongoing after 120 years.
potash bearing strata. Only small multi-nutrient fertilizer production.
amount of drilling required to
elevate to M&I status.
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FAST TRACK SCHEDULE

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• 2018 2019

• • JORC Resource for Ebeleben

• • JORC Resource for Mühlhausen areas

• • Identify locations for twin drillholes

• • Drill twin holes and verify historic data*

• • Elevate to JORC Indicated status

• • Conduct PEA/Scoping Study

• Pending funding

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WHY DAVENPORT RESOURCES ? A COMPELLING BUSINESS CASE

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• Large high quality resource in historic potash region

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• Resources support long-life project > 50 years

This project ticks all the boxes

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• Low-risk jurisdiction

• Regional government supportive of job creation projects

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• Proximity to markets (Europe still a net potash importer)

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• Low infrastructure requirements (power, water, gas, rail)

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• Experienced management team. Key staff based in Europe

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INVESTOR & MEDIA ENQUIRIES

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BUILDING EUROPE’S LARGEST POTASH INVENTORY

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