VYSARN LIMITED — Interim / Quarterly Report 2016

Apr 17, 2016

MHM Metals Limited Level 1, 100 Albert Road South Melbourne VIC 3205 AUSTRALIA

T: +613 9692 7222 F: +613 9077 9233 E: info@mhmmetals.com www.mhmmetals.com

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ASX Announcement

Monday 18 April 2016

MHM QUARTERLY ACTIVITIES REPORT

MHM Metals (ASX: MHM) is pleased to provide the following Quarterly Activities Report for the period ended 31 March 2016.

Corporate

During the Quarter, the Company received an R&D Incentive rebate of $2.93m for the 2015 Financial Year.

The Company also provided a Small Share Parcel Buy-Back facility which allowed shareholders holding less than 16,667 to sell their shares for $0.033 (3.3 cents) per share.

Subsequent to the quarters end, the company acquired a total of 4,890,540 shares under the Small Share Parcel Buy-Back facility which were immediately cancelled, reducing the company share count to 136,228,616.

As at 31 March 2016, the Company held cash and deposits totalling $7,705,000.

Company Snapshot

Capital Structure

Ordinary shares on issue: 136,228,616 Market Cap (at 2.8c): $3,814,401 Cash (as at 31 Mar 2016): $7,705,000

Directors

Paul Kopejtka (Non- Executive Chairman) Joseph van den Elsen (Managing Director) Chris Goodman (Non-Executive Director)

Company Secretary

Justin Mouchacca

Subsequent to the quarters end, the Company also finalised the sale of its US property for net proceeds of approximately USD$507,000.

Business Development

On January 11, 2016, the Company entered into a Binding heads of Agreement (BHOA) with Stone Resources Australia Limited (Stone) to develop the Brightstar Gold Project located in the Laverton region of Western Australia.

Subsequently, the Company advised Stone that as a result of what it considered various breaches of the covenants, warrants and representations it made in the BHOA between the parties, it was terminating the BHOA with immediate effect.

On April 8, 2016 the Company issued Stone with a demand for payment of the $100,000 break fee and further damages incurred as a result of the various alleged breaches of the covenants, warranties and representations they made in the BHOA.

With significant cash reserves of c$8m, the Company continues to identify and consider new business opportunities predominantly in the Resources sector

MHM Metals Limited ABN 41 124 212 175

Registered Office: Level 1, 100 Albert Road, South Melbourne, VIC 3205 | Tel: 03 9692 7222| Fax: 03 9077 9233 | E: info@mhmmetals.com | www.mhmmetals.com

The Company is currently reviewing two domestic opportunities originated internally and remains open to considering 3[rd] party originated proposals.

END

For more information :

MHM Metals Limited Joseph van den Elsen, Managing Director: +61 (3) 9692 7222

MHM Metals Limited ABN 41 124 212 175

Registered Office: Level 1, 100 Albert Road, South Melbourne, VIC 3205 | Tel: 03 9692 7222| Fax: 03 9077 9233 | E: info@mhmmetals.com | www.mhmmetals.com

Appendix 5B Mining exploration entity quarterly report

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, 01/05/2013

Name of entity

MHM METALS LIMITED

ABN 41 124 212 175

Quarter ended (“current quarter”) 31 March 2016

Consolidated statement of cash flows

Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for: (a) Exploration & evaluation (b) US Development (c) Production (d) Administration 1.3 Dividends received 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income tax refund - R & D Refund Interest received – R & D refund 1.7 Other (provide details if material) GST Refund Moolap Remediation Redundancy costs Brightstar Project Costs Net Operating Cash Flows	Current quarter $A’000	Year to date (9months) $A’000
	- - - - (373) - 40 - 2,983 8 9 - - (171)	222 (25) - (172) (1,053) - 53 - 7,663 8 9 (100) (158) (171)
	**2,496 **	**6,276 **
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets (d) Aluminium processing activities 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (deposits received) - Reclassification of Term Deposit Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)	- - - - - - - - - 35	- - - - - - 28 - - 85
	35	113
	2,531	6,389

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	2,531	6,389
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) Net financing cash flows	- - - (9) - -	200 - - (249) - -
	(9)	(49)
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end ofquarter	2,522 5,193 (10)	6,340 1,358 7
	7,705	7,705

Payments to directors of the entity, associates of the directors, related entities of the entity and associates of the related entities

1.23 1.24	1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	Curent quarter $A'000
			62
			-
1.25 Explanation necessaryfor an understandingof the transactions Directors’ fees and Executive salaries paid during the March 2016 quarter. Non-cash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows - 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest -		Explanation necessaryfor an understandingof the transactions
		Directors’ fees and Executive salaries paid during the March 2016 quarter.
	-
	Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest
	-

• See chapter 19 for defined terms.

Appendix 5B Page 2

Appendix 5B Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1	Loan facilities
3.2	Credit standby arrangements

n.
Amount available		Amount used
$A’000		$A’000
	-		-
	-		-

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration 4.5 Other – Brightstar Project Small Share Parcel BuyBack	$A’000
	(75)
	-
	-
	(225)
	(125) (161)
Total	(586)

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Curent quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other -MHM has provided a guarantee to Alcoa in connection with an operating lease.	1,304	4,843
	6,033	-
	-	-
	368	350
Total: cash at end of quarter(item 1.22)	7,705	5,193

Changes in interests in mining tenements and petroleum tenements

6.1 Interests in mining tenements and petroleum tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements and petroleum tenements acquired or increased	Tenement reference and location	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
	-	-	-	-
	-	-	-	-

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note3) (cents)	Amount paid up per security (see note3) (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs,redemptions	-	-	-	-
	-	-	-	-
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	141,119,156	141,119,156	FP	FP
	-	-	-	-
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	300,000 150,000 100,000 300,000 1,450,000 150,000 500,000 100,000		Exercise price 180 cents 100 cents 126 cents 100 cents 171 cents 135 cents 100 cents 45 cents	Expiry date 20 June 2016 30 June 2016 23 August 2016 5 November 2016 29 November 2016 14 February 2017 18 July 2017 18 December 2018
7.11 Debentures (totals only)
7.12 Unsecured notes (totals only)

• See chapter 19 for defined terms.

Appendix 5B Page 4

Appendix 5B Mining exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).

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

Sign here: ............................................. Date: ...18 April 2016............ (Company Secretary)

Justin Mouchacca

Print name: .........................................................

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 wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

• 2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements and petroleum tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement or petroleum tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

• 4 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.

• 5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

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• See chapter 19 for defined terms.

01/05/2010 Appendix 5B Page 5