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Tawana Resources Nl - Bald Hill Lithium-tantalum Project To Deliver Outstanding Cash-flows And Returns

Release Date: 11/07/2017 09:39:00      Code(s): TAW     
Tawana Resources NL
(Incorporated in Australia)
(Registration number ACN 085 166 721)
Share code on the JSE Limited: TAW
JSE ISIN: AU0000TAWDA9
Share code on the Australian Securities Exchange Limited: TAW
ASX ISIN: AU000000TAW7
(?the Company? or ?Tawana?)


    Bald Hill Lithium-Tantalum Project to Deliver Outstanding Cash-
    Flows and Returns
    Tawana Resources NL (?Tawana? or the ?Company?) is pleased to announce that the Bald Hill Mine in Western
    Australia (Project) is on track to become a low-cost producer of quality spodumene (lithium) concentrate in early
    2018 following outstanding results from a Pre-Feasibility Study (PFS).

     Bald Hill PFS Highlights (Tawana earning a 50% interest in Project, owns 50% of Lithium Rights)1 and A
     -    Confirms technical and financial viability of a 1.2Mtpa lithium Dense Media Separation circuit (DMS) adjacent to
          the existing tantalum processing facility (TPF).
     -    Forecast annual production of approximately 155,000tpa of spodumene concentrate from the DMS and 260,000lbs
          pa of tantalum pentoxide from the TPF.
     -    Maiden Lithium Ore Reserve of 4.3Mt at 1.18% Li2O and 208 ppm Ta2O5 representing approximately 90% conversion
          of existing Indicated Resources. Additional tantalum Ore Reserve of 1.4Mt at 317ppm Ta2O5.

     -    Declared Ore Reserve underpins an initial ?starter pit? life of 3.6 years with further growth for the Project
          expected from infill and extensional drilling. Inferred Resources outside the scope of the PFS are an additional
          8.2Mt at 1.14% Li2O, most of which is contained within scoping level pit optimisation shells, indicating potential
          for a 10-year mine life prior to resource growth.

     -    Long lead items have been ordered, and construction mobilisation has commenced under an early works contract.
          Production is scheduled for the March quarter 2018.
    
 Economics

     -    Exceptional Project economics with an IRR of 185% and payback in approximately 12 months.
     -    Lowest capital-cost lithium project in Australia at A$42M (excluding pre-production operating costs). A$37.5M
          already committed to the Project with Tawana earn in ($12.5m) and off-take contractual pre-payments ($25m).
     -    Average EBITDA for ?starter pit? life-of-pit of approximately A$83M per annum.

     -    Operating cash flow for the ?starter pit? of approximately $223M.
     -    The NPV10% of the ?starter pit? is A$150M, potential to increase significantly with upgrade of Inferred Resources
          and inclusion of a low-cost Lithium Fines Circuit.
     -    Estimated life-of-pit operating cash costsB of only A$508/tonne (US$381/tonne) of spodumene concentrate FOB
          (including tantalum pentoxide by-product credits) resulting in a 100% pre-tax margin.
     Opportunities for Growth
     -    Significant opportunity to increase annual production by treatment of stockpiled screened fines and middling
          concentrates containing about 25% of mined lithium, through the Lithium Fines Circuit currently under
          consideration. Approximately A$117/tonne of operating cash costs carried by the DMS concentrate operating
          costs.


1 All figures throughout this announcement regarding the Project and the PFS are, unless expressly stated otherwise, presented on a 100% of Project basis.
Tawana, through its 100% owned subsidiary Lithco No. 2 Pty Ltd, has earned a right to 50% of all lithium minerals from the tenements comprising the Project
? refer to announcements of 28 June 2017. Tawana is required to spend $12.5 million in capital expenditure for upgrading and converting the existing plant
on the Bald Hill tenements for processing ore derived from the Project, infrastructure costs, pre-stripping activities and other expenditures including
operating costs by 31 December 2019. Upon completion of such capital expenditure commitment, Tawana (through Lithco No.2 Pty Ltd) will be entitled to
a 50% interest in the Project comprising the Bald Hill tenements, the processing plant and infrastructure at Bald Hill, and all minerals from the Bald Hill
tenements under the terms of the Bald Hill Joint Venture Agreement (which will only take effect upon satisfaction of the capital expenditure obligation).
Refer to announcements of 24 February 2017.

  -    Infill drilling on the current additional Inferred Resources of 8.2Mt at 1.14%C Li2O is expected to add significantly to
       the life of the Project. Extensional drilling also is continuing to grow the total mineralised pegmatite footprint
       which has expanded laterally by about 40% since the Resource Estimate. Bald Hill Project (TAW 50% of
       Lithium Rights, earning 50% of the Project)A

Tawana Resources NL (?Tawana? or the ?Company?) is pleased to advise the results of the Pre-Feasibility
Study (?PFS?) on the Bald Hill Lithium-Tantalite Project (Project), located south east of Kambalda,
Western Australia. The Project is set to become a low-cost producer of high-quality spodumene (Lithium)
concentrates in Q1 2018.

The PFS was completed by Tawana with the assistance of a group of highly experienced consultants and
contractors. In particular, the DMS plant capital and operating costs (including maintenance) were
compiled by Primero Group (Primero). Subsequent to the PFS level estimate, Primero has provided Tawana
and its Joint Venture Partner, Alliance Mineral Assets Limited (together the Joint Venture Parties) with a
fixed price lump sum commitment (which is now included in the PFS) to build the DMS plant which has
given the Joint Venture Parties certainty on the capital estimate. Primero have recently commissioned a
DMS lithium plant in Western Australia and are currently involved in several significant lithium projects
globally.

All figures throughout this announcement regarding the Project and the PFS are, unless expressly stated to
the contrary, are presented on a 100% of Project basis. All production targets and financial information
based on production targets, are supported exclusively by the ore reserves discussed below under the
heading ?Mining / Reserves?.

Tawana, through its 100% owned subsidiary Lithco No. 2 Pty Ltd, has earned a right to 50% of all lithium
minerals from the tenements comprising the Project, with a right to farm in to 50% of the Project (including
tenements, plant and all minerals) through a further A$12.5M of capital expenditureA. Tawana has
sufficient funds to meet this earn in requirement.

The PFS for the Project, being the initial ?starter pit?, contemplates a net cash flow before tax of $223
million before tax and a net present value (@ 10% discount rate) of $150 million with an internal rate of
return of 185%. The payback period is rapid at approximately 12 months. The NPV is expected to increase
significantly as additional ore Reserves are defined.

Average concentrate cash costs (net of tantalum pentoxide by-product credits) are A$508/t (US$381/t).

Net cash costs are expected to reduce to under A$400/t if an allowance is made for mining and crushing
of stockpiled screened fines and middling concentrates containing about 25% of mined lithium were to be
processed. The fines and middlings are likely to be treated via a floatation circuit (LFC), however test
work is incomplete and the LFC was excluded to reduce initial construction time and cost.
The capital cost estimate to construct a new 1.2Mtpa DMS plant, upgrades to the existing tantalum plant
and infrastructure at the Bald Hill site, including all direct costs is approximately A$42 million (+/- 5% to
15%). This estimate includes a contingency of 10% and excludes pre-production operating costs. The
financial model has assumed pre-production costs as highlighted in the capital section of the
announcement.

Tawana Managing Director Mark Calderwood stated:
?The results show an impressive IRR and payback period. Given we have a modest sized ?brown-fields?
construction project, we believe we are on track to become one of Australia?s next lithium producers with
our first shipment planned for the first quarter of 2018.

?We are keeping to our strategy of fast tracking lithium production to take advantage of the strong near-
term demand whilst minimising dilution to our shareholders. Given our spodumene recovers so well
through the DMS, and produces a high-grade concentrate, the two-phase production approach of getting
the DMS commissioned in 2018 and then look to construct a LFC out of cash flow has assisted in the Bald
Hill Project being one of Australia?s lowest upfront capital cost, stand-alone lithium projects.
?It is exciting to be involved with the Project and the economics have highlighted attractive returns.
Drilling is also continuing on infilling the current 8Mt Inferred Resource area with a view to converting
the bulk of this into Reserves and to increase the mine life to 10 years.

?There is significant exploration upside potential at Bald Hill. The Company has only drilled 20% of the
known pegmatite footprint and there are significant other portions of our tenements that are unexplored
so we are very confident of being at Bald Hill for many years to come.?

The Bald Hill Mine is located in the southeast of the Goldfields-Esperance Region of Western Australia,
approximately 105 km south southeast of Kalgoorlie, and about 56km east of Widgiemooltha. The main hub
in the region providing access to the Project is Kalgoorlie, which can be accessed by air, rail and road from
Perth.

The principal road access to the Project is via the (sealed) Coolgardie-Esperance Highway (National
Highway 94), and then the Binneringie Road from Widgiemooltha, a distance of 65 km of unsealed shire
road. The Project is located approximately 350km by road from the port of Esperance.
The Project will consist of open pit mines, a Dense Media Separation Process Plant, tailings dam, waste
rock dumps, water harvest and storage dams, stores, camp including administrative and living quarters and
associated infrastructure.

Lithium concentrate will be hauled via Binneringie Road to the Port of Esperance. Tantalite concentrate
will be packed into 205L drums, sealed and exported via Fremantle in standard shipping containers.
Tawana has signed an offtake agreement with a fixed price for two years of US$880/t (A$1,173) (FOB
Esperance) for 6% Li2O concentrates. The offtake agreement provides for an attractive fixed price in US
dollars per dry metric tonne for the first 2 years of production and shipping costs are borne by the offtake
party. Refer to Tawana?s ASX announcement of 26 April 2017.

Financial Evaluation
The key commercial results of the PFS are presented below (on a 100% of Project basis).
Table 1: Key Parameters from the PFS Financial Model
  Summary of Key Parameters from PFS ?Starter Pit? Financial Model


  Life of Mine (LOM)                                   Years          3.6
  LOM Ore Mined (lithium)                              Mt             4.3
  LOM Ore Mined (tantalum)                             Mt             1.4
  LOM Waste Mined                                      Mt             51.5
  LOM Strip Ratio                                      (waste:ore)    9:1
  Plant Feed Rate (lithium)                            tpa            1,200,000
  Plant Feed Rate (tantalum)                           tpa            320,000
  Average Lithium Ore Head Grade                       % Li2O         1.18%
  Average Lithium Recovery                             %              65.8%
  Average Spodumene Concentrate Production             tpa            155,000 (@6% Li2O)
  Average Tantalite Pentoxide Production               lbs Ta2O5 pa   260,000
  Average Tantalum Pentoxide Recovered Grade           Ta2O5          25%
  Tantalite Forecast Price                             US$/lb FOB     60
  Forecast FX rate                                     AUD/USD        0.75
  Initial capital cost (including 10% contingency)     A$M            42.21
  Offtake Prepayment3                                  A$M            $25m, received in three instalments being
                                                                      15 April 2017 ($A7.5m), 15 July 2017
                                                                      ($8.75m) and 15 September 2017 (A$8.75m).
  Repayment of Offtake Prepayment                      A$M            $25m, 20% of sales until full amount repaid.
  Sustaining Capital                                   A$M            $6.12
  Average LOM Operating Costs (Real$)                           A$t product          641
  Average Operating costs (after tantalite credits)             A$/t product         508
  Average Annual EBITDA                                         A$M                  83.1
  NPV (10% Discount Rate, Before Tax)                           A$M                  150.2
  IRR                                                           %                    185.03
  Payback                                                       Months               12

   1.   Pre-production capital costs exclude pre-production operating costs. They are expected to be between A$10M and A$22M depending on
        the financing terms with key contractors (mining and crushing). The financial model has included the upper limit of this range and
        includes a 10% contingency.
   2.   Includes a new tailings dam after production has commenced and $1.0m per year for general sustaining capital. Plant sustaining costs
        including in process operating costs.
   3.   Binding Prepayment and Offtake Agreement. Refer to ASX announcement on 26 April 2017.

Capital Cost Estimates
The capital cost estimate to construct a new 1.2Mtpa Dense Media Separation plant, refurbish the existing
tantalum plant and infrastructure at the Bald Hill site, including all direct costs, is approximately A$42.2
million. This estimate includes a contingency of 10%.
The capital costs are shown in Table 2 and were estimated as follows:
Table 2- Capital Costs Estimates
  Capital Item                    Value - A$M        Source/Comments
  DMS Process Plant               $27.0              Primero feasibility study and fixed lump sum.
  Non-DMS Infrastructure          $9.2               Includes refurbishment of tantalum plant, earthworks, roadworks,
                                                     communications, electrical supply, site buildings, first fills, light
                                                     vehicles, camp running costs.
  Owners Costs                    $2.0               Project and development team salaries.
  Contingency                     $4.0               10% on DMS process plant, non-DMS infrastructure capital costs and
                                                     owners costs.1
  TOTAL                           $42.2
   1.   Any of the $3M contingency saved under the Primero contract is to the benefit of Primero, excess expenditure under the
        contract scope is to be borne by Primero.

Operating Cost Estimates
The estimated LOM cash operating costs ranges between A$172-$624/t year on year (FOB, after tantalite
credits) of concentrate produced. The LOM average cost of production after tantalum credits is
approximately A$508/t concentrate FOB.
In addition, the Company will carry A$117/t of operating costs as fines and middlings. It is anticipated
that a flotation circuit will be built in the future to process these and/or direct shipped to a market in
China.
The Project operating costs utilised in the study base case are shown in Table 3 below. The principal
sources for the operating cost estimates are:
Table 3- Operating Costs Estimate Details
  Cost Item                     Amount                     Source/Comments
  Mining Ore and Waste          $3.65/t                    Mining contractor rates plus drill and blast, grade control and
                                                           other costs. Includes mining overheads of $0.24 per tonne
                                                           mined for the mining team including flights/camp/support
                                                           costs, light vehicles and grade control.
  Crusher feeding costs         $9.00/plant feed           Crushing contractor rates plus on-costs.
  Processing (lithium)    $14.15/t feed         From Primero feasibility study. Assumed a flat rate of feed
                                                irrespective of the feed quality from the mine and the process
                                                flow required. Also includes contract power station.
  Processing (tantalum)   $5.58/t feed          Calculated by Tawana and from previous historical production
                                                records and new first principles.
  Product transport and   $51/t transported     Haulage contractor rates ? For transport to Esperance, storage
  storage (lithium)                             and ship loading.
  Product transport and   $380/t transported    Based on historical numbers shipped from Fremantle.
  storage (tantalum)
  Corporate and Admin     4.66/t processed of   From Primero feasibility study and added additional staff
                          lithium ore or        costs/flights/camp/support costs, light vehicles and Lanfranchi
                          $5.6m pa.             camp rental cost.
State royalties are calculated separately from the operating costs and is 5% for both lithium and tantalum
concentrates.
Geology / ResourcesC

CSA Global Pty Ltd (?CSA Global?) was commissioned by Tawana to compile the maiden lithium Mineral
Resource estimate for the Bald Hill Project and update the tantalum Resource.
The Bald Hill Pegmatite Mineral Resource comprises one large, main, sub horizontal pegmatite body,
striking north-south, with a strike length of 1,070 metres, and a width at its widest point of 775 metres.
This main body is surrounded by several smaller discrete pegmatite bodies, sub-parallel to the main, which
result in a total strike length for the whole resource of 1,245 metres, and a total width of 990 metres. The
Mineral Resource has a total vertical depth of 195 metres, beginning 20 metres below the natural surface
and plunging gently to the south along its entire strike length.
The Mineral Resource was classified as Indicated and Inferred in accordance with the JORC Code (2012
Edition) on a qualitative basis; taking into consideration numerous factors including drillholes spacing,
estimation quality statistics (kriging slope of regression), number of informing samples, average distance
to informing samples in comparison to the semivariogram model ranges, and overall coherence and
continuity of the modelled mineralisation wireframes.
Table 4 | Bald Hill Project, Resources above 0.5% Li2O cut-off
                                       Grade           Contained           Grade          Contained
     Resource           Tonnes
                                        Li2O              Li2O             Ta2O5             Ta205
     Category            (Mt)
                                         %              Tonnes              ppm           (,000) Lbs
     Indicated            4.6           1.25             57,100             207              2,200
      Inferred            8.2           1.14             94,300             130              2,500
        Total            12.8           1.18            151,400             158             4,700


Table 5 | Bald Hill Project, Resources above 0.5% Li2O and 200ppm Ta2O5 cut-offs
     Resource           Tonnes         Grade           Contained           Grade          Contained
     Category            (Mt)           Li2O             Li2O              Ta2O5             Ta205
                                         %              Tonnes              ppm           (,000) Lbs
     Indicated            1.9           1.26            23,700              312              1,300
      Inferred            1.4           1.10            15,000              291               900
        Total             3.2           1.19            38,700              303             2,100
Note
1)     The tantalum resources form part of the lithium/tantalum resources reported in Table 4.

Table 6 |Bald Hill Project, Resources below 0.5% Li2O and above 200ppm Ta2O5 cut-offs
     Resource           Tonnes          Grade          Contained
     Category            (Mt)           Ta2O5             Ta205
                                         ppm           (,000) Lbs
     Indicated            2.8            325              2,000
      Inferred            2.9            297              1,900
        Total             5.7            311             3,900
Note
1) The tantalum resources reported in Table 6 are additional to those reported in Table 4 and 5.



Mining / Reserves
The lithium and tantalite mineralisation at Bald Hill is amenable to low cost open pit mining for the
proposed 1.2Mtpa of ore to the ROM (Run-of-Mine) pad. It is envisaged that mining of staged open pits will
be performed using a conventional truck/shovel and truck/excavator mining method. The mining method
would include grubbing of vegetation, stockpiling of topsoil, pre-stripping of the overburden, followed by
mining of the mineralisation, and on the completion of mining landform rehabilitation.
Tawana, with the assistance of consultants completed a mining study on the drill-defined mineralisation
covering the Bald Hill Mine prospects. The defined mineralisation comprised a block model of the lithium
and tantalite Mineral ResourceB in the area surrounding the 5 existing open pits, located about 1-2km south-
south-west of the existing processing facilities. The mineralisation is near surface.
To minimise ore loss and dilution, ore was calculated in blocks of shallow bench height of 2.5m, and
oriented down the bedding planes. Waste mining would utilise 5.0-10.0m benches.
The mining sequence will consist of: advance dewatering, grade control drilling and modelling, followed
by survey control, drill and blast, survey control and load and haul operations.
To establish mineable quantities and grades a number of optimisations were completed on the Resource
model completed by CSA Global in June 2017. These results were then analysed with a set of current price
and cost assumptions to determine their respective value and an optimal shell was selected for the study
based on both value and risk.
Using conceptual mine plans a number of mining contractors were requested to provide budgetary pricing
for open pit mining, and these costs were used to build up mining costs included in cost assumptions for
the mining study.
Pit shells were used as stage designs and from these a mine production schedule was completed for the
life of the mine.
Pit optimisations were undertaken by CSA Global using Whittle Four-X pit optimisation software (Whittle).
The block model of the lithium and tantalite ores including the overburden and waste rocks was imported
into Whittle.
A number of optimisations were run and the case selected to be the base Whittle pit optimisation utilised
the indicated lithium and tantalum Mineral Resource. An ultimate pit was designed using only JORC Mineral
Resource Indicated material only to create staged mine Reserves for the mine schedule.
The mine schedule was completed using Maptek Evolution scheduling software after importing the updated
resource model from Vulcan. Using a cutoff grade of 0.39% Li2O for Indicated material only and iterations
of the mining schedule were run to maximise early grade while minimising waste movement.
Table 7: Bald Hill Project, Reserves above 0.39% Li2O
 Reserve                 Tonnes            Grade              Contained         Grade    Contained
 Category                   (Mt)            Li2O                   Li2O         Ta2O5         Ta205
                                               %                Tonnes           ppm     (,000) Lbs
 Proven                         -              -                      -             -             -
 Probable                     4.3           1.18                 50,800           208         2,000
 Total                        4.3           1.18                 50,800           208         2,000
Notes
   1)   Allows for mining ore loss of 5% and dilution of 5%


Table 8: Bald Hill Project, Reserves below 0.39% Li2O and above 200ppm Ta2O5 cut-offs
 Reserve                 Tonnes           Grade            Contained           Grade      Contained
 Category                   (Mt)            Li2O                 Li2O          Ta2O5          Ta205
                                          %               Tonnes             ppm        (,000) Lbs
 Proven                         -              -                    -              -               -
 Probable                     1.4           0.21               3,000             317          1,000
 Total                        1.4           0.21               3,000             317          1,000
Notes
   1)   Allows for mining ore loss of 5% and dilution of 5%
   2)   Reserves contained in Table 7 are additional to those reported in Table 8.


The production targets and forecast financial information outlined in this announcement are based solely
on the Reserves in Tables 7 and 8 above.
Processing
Lithium
Primero Group Pty Limited (Primero) completed a feasibility study on the lithium processing capital and
operating costs for the Project. The Study was required to establish the capital cost of the Project (now
fixed lump sum price) and an expected process and maintenance operating cost to an accuracy of +/-25%.
It was agreed that the project should be advanced in two separate phases. The first phase of development
is intended to fastrack the Project to achieve lithium production by the first quarter of 2018. Phase 1 works
involve the design and construction of a 1.2Mtpa front end spodumene concentrator utilising dense medium
separation to produce a coarse (+1mm) spodumene concentrate of 6.0% Li2O.
The -1mm fines material from this new concentrator will be stockpiled for future processing. All (+1mm)
Secondary DMS floats (Middlings) material will be stockpiled for future consideration during the Phase 2
development.
Phase 2 of the development is the inclusion of a milling and processing circuit. This phase 2 will be finalised
following the completion of test work, but the layout of Phase 1 has allowed for the Phase 2 circuits. Note
that the PFS is based on Phase 1 only.
A contract crushing operation will produce P100 = 10mm crushed ore to be fed to the processing plant. The
existing tantalum concentrate spirals and tables plant will be fed with separate high tantalite bearing ore.
The spodumene concentrate DMS circuit is fed at 161tph to a wet screen that removes - 1mm material
which is sent to storage after removal of portion of the tantalum minerals through rougher spirals. The -
10+1mm material continues to the DMS Feed Prep Screen coarse side which separates the feed to a -
10+5mm (coarse fraction) and -5+1mm (fines fraction). The coarse fraction is mixed with Ferrosilicon (FeSi)
medium and pumped to the Primary Coarse DMS Cyclone.
The fines fraction is pumped to a reflux classifier where mica is removed, dewatered and sent to rejects.
The fines fraction is pumped back to the Feed Prep Screen (fine side). The fines material is mixed with
FeSi and pumped to the Primary Fine DMS Cyclone. The Primary DMS cyclone underflow (coarse and fines)
are sent to the Sinks Drain & Rinse Screen (split) where FeSi is recovered. The Primary DMS cyclone overflow
(coarse and fines) are combined on the Floats Drain & Rinse Screen, FeSi is recovered and floats sent to
rejects loadout. The coarse and fine ore are mixed with a higher SG FeSi and pumped to respective
Secondary Coarse and Fine DMS Cyclones.
The Secondary DMS cyclone underflow (coarse and fines combined) is sent to the combined Drain & Rinse
Screen (Sinks & Floats split) where the sinks from the main spodumene concentrate product after FeSi
removal, is recovered. The Secondary fines DMS cyclone overflow is sent to a separate Drain & Rinse Screen
(middlings) for future processing. The Secondary coarse cyclone-overflow is sent to a small rolls mill for
grinding to 3.35mm and fed back to the primary 1mm wet screen with the primary feed.
Due to the low concentration of iron and mica in the concentrates, no allowance has been made for the
removal of deleterious elements.
Table 9: Key Process Design Criteria
   Parameter                                         Units        Value        Ref
                                                     tpa          1,200,000    Lithco/Tawana
   Wet Plant Nominal Feed                            tph          161.2        Calculated
   Wet Plant Operating Hours per year                hr           7,446        Calculated
   Wet Plant Utilisation                             %            85.0         Calculated
   Spodumene Ore Head Grade                          %Li2O        1.41         Test work
   Tantalum Ore Head Grade                           %Ta2O5       0.023        Test work
   Spodumene Product Grade                           %Li2O        6.0          Test work
   Wet Plant Feed F100                               mm           10.0         Lithco/Tawana
   Wet Plant Feed F80                                mm           8.3          Test work
   Spodumene Product                                 tpa          153,417      Calculated
   Spodumene Mass Yield (as % of plant feed)         %w/w         12.75        Calculated

The Lithium Circuit is designed to be feed at 1.2mtpa however only about 940,000t of the feed passes
through the DMS cyclone units, about 190,000t of -1mm is screened out and stockpiled for likely future
processing and 70,000 of slimes and mica is sent to tailings.

Tantalum

After crushing to P100 passing 10mm, tantalum only ore will feed the existing 320,000tpa Tantalum
Processing Facility (TPF). The TPF ore will feed to a 1.4mm primary screen with screen oversize
recirculated through a VSI crusher. Screen undersize is feed to a three-stage spiral circuit, gravity
concentrates are then feed to a dedicated cleaner spiral circuit followed by Wilfley tables. Spiral tails are
pumped to the TSF. The Wilfley tables and if required electromagnets will be used to produce 25% Ta205
concentrates to be drummed for export. Table tails will be added to Lithium Fines Circuit stockpiles
subject to lithium grades.
The -1mm fines from the lithium circuit after de-sliming will be passed over rougher spirals to remove a
medium grade tantalum concentrate. The rougher spiral tails will be pumped and dewatered to stockpile
for future treatment through the LFC. The rougher concentrate will be fed to the TPF.


Metallurgical Testwork

Lithium

The metallurgical programs were supervised by Noel O?Brien of Trinol Pty Ltd, and the test work was
conducted at the Nagrom mineral processing laboratories located in Perth, Western Australia.
Following on from the excellent results obtained from the variability test work (refer ASX announcement
on 13 February and SGX announcement on 12 February 2017), larger scale tests were done on a 160kg
composite of core used in the variability tests.D
The sample was crushed to 10mm and screened at 1mm. The -1mm fines have been retained for later
testing. The +1mm fraction was further screened at 5.6 mm to assist the DMS gravity processing. The -
5.6+1mm fraction was processed in a reflux classifier to remove mica, and then both -10+5.6mm and -
5.6+1mm fractions were processed in a 100mm DMS cyclone.


The results of this phase of the test work were:
Table 10: Feed Composition

 Feed                                                   Mass Yield %         Cont. Li

 -1mm screened out after 10mm crushing                              17         14.7%

 Mica/gangue minerals removed in reflux classifier                    5         1.5%

 Composite treated through DMS                                      78         83.8%

 Head grade of composite 1.41% Li2O


These results demonstrated that the amount of fines produced was limited to 17% by coarse crushing at
10mm and that over 80% of the contained lithium was available for processing via the cheaper gravity DMS
route.
The results obtained from DMS processing were:
Table 11: Coarse fraction (-10+5.6mm) at SG 2.8 (55% of DMS feed)

 Fraction                              % Mass Yield          % Li2O       % Cont. Li      % Fe2O3

 SG 2.8 Sinks                                   17             6.30            78.9          0.76
 SG 2.8 Floats                                   12            2.56             13.3         0.56

 SG 2.7 Floats                                   71            0.16              7.8         0.29


Table 12: Finer fraction (-5.6+1mm) at SG 2.9(mica removed) (45% of DMS feed)

 Fraction                             % Mass Yield           % Li2O       % Cont. Li      % Fe2O3

 SG 2.9 Sinks                                    16            6.55             73.4         0.90

 SG 2.9 Floats                                   21            1.53             21.8         0.57

 SG 2.7 Floats                                   63            0.11              4.9         0.33


These results highlighted two key characteristics of the Bald Hill mineralisation:
- The ability to produce grades well in excess of 6% Li2O at good mass yields with acceptably low iron
  content.
- The ability to reject 60-70% of the feed mass after a first pass DMS, thus reducing processing costs
  appreciably.

Initially a product grade of over 7% Li2O was obtained in the coarser fraction using a density of 2.9 and,
whereas this was an excellent result, it was generally significantly above market requirements. Hence a
lower cut density of 2.8 was adopted to increase the mass yield. This resulted in a mass yield of 17% at a
grade of 6.3% Li2O at SG 2.8.
The middlings fraction, from the coarse DMS, or 2.8 floats, still had a grade of 2.56% Li2O and a further
test was done by re-crushing this to 3.35 mm to determine additional DMS recovery. This test resulted in
a further mass yield of 4% at a grade of 6.14% Li2O to the sinks.
Based on these results the PFS used the following key metallurgical factors:
DMS circuit
   -   Total feed - 1,200,000tpa
   -   Feed to DMS cyclones - 937,000tpa
   -   -1mm Fines from wet screening after desliming - 17.8% mass 16.4% of contained lithium
   -   Primary concentrates - 65.8% of contained lithium in total feed or 84.3% of lithium in feed to DMS
       cyclones
   -   Middlings - 10.3% of contained lithium in total feed of 13.2% of lithium in feed to DMS cyclones
   -   Tantalum recovery to concentrates from -1mm Fines 16.2% of contained tantalum in total feed

Tantalum

There has been significant prior test work undertaken for the tantalum ore, however it was considered
appropriate to use actual Haddington throughput and recoveries based on the current TPF arrangement.
The plant originally had a ball mill to re-grind a portion of the feed prior to scavenger spirals, however in
practice it was found that there was little commercial benefit to run the ball mill and it was subsequently
removed from the circuit. The existing VSI crusher at circa 500% recycle can produce 330,000 tpa of -
1.4mm feed to the spiral circuit. Recoveries over the last two years through the spiral circuit were about
68% at an ore feed of 80,000t/qtr to 85,000t/qtr, which produced a concentrate grade of about 14% Ta2O5
prior to tabling. Given that tantalum feed grades are expected to be lower than during the Haddington
era, a reduced 65% recovery was used.
Table 13: Haddington 2004-2005 Production on a Quarterly Basis
              Ore               tantalum     Recovered      Calc.   Stated
 Quarter    treated     Head    pentoxide      grade        Rec.     Rec.    concentrate      con grade
                                 pounds
                 t      ppm       rec.       ppm Ta2O5       %        %           t            % Ta205
 Mar-04     84,639      421       56,379         297         71      71.5       262              14.4
 Jun-04     87,071      431       54,844         281         65      66.6       308              12.6
 Sep-04     80,580      437       53,732         298         68      69.1       298              12.1
 Dec-04     80,117      405       51,110         285         70      73         252              14.2
 Mar-05     76,200      424       49,570         290         68      70         239              14.2
 Jun-05     81,456      443       50,475         277         62      67         220              16.5
 Sep-05     93,614      470       66,453         317         67      68         265              15.8
 Dec-05     71,718      408       44,854         279         68      69          77              41.6


It has been proposed that the -1mm fines from the lithium circuit be treated in a separate spiral plant to
recover tantalum prior to stockpiling for future grinding and flotation (or another method) to recover
spodumene.
-1mm fines from the 150kg bulk sample were tabled after desliming. This work simulates rougher spiral
performance and these results show that 14.6% of the total contained tantalum could be recovered from
the -1mm lithium fines. A further 4.6% could be recovered from the fines generated after re-crushing the
coarse DMS middlings, bringing the total recovery of tantalum on rougher spirals to a possible 19.1%.
This rougher concentrate would require further upgrade by tabling and magnetic separation. This work has
not been done yet, but it is expected that a further 15% losses would be incurred in these clean-up
operations.
Infrastructure
The Mine is located in the Goldfields region of Western Australia where good infrastructure is available
for mining projects.
A sealed highway and unsealed public road with RAV-7 approval provides access from the port of Esperance
to within 1.8km of the plant site where existing private access road will require minimal upgrading for the
increased traffic load.
Process water requirements for processing can be serviced from water resources within the mine area, as
per the existing water Permits. Potable water will transported to site until the new Mine camp is
constructed.
Power will be produced on site using diesel generators on a rental basis.
The site will operate on a fly-in fly-out basis to Kalgoorlie or Kambalda with a village constructed to house
operations personnel whilst on site. During construction and operations a combination of the existing
village and a leased neighbouring village will be used.
Additional offices and storage shed will be constructed and an upgrade to the existing laboratory
completed.
A new fuel storage facility will be constructed.
Logistics and Port
The lithium concentrate will be hauled via Binneringie Road to the Port of Esperance.
3 Trucks will depart from an Esperance depot and storage facility and will be able to complete 1 cycle per
12-hour shift or 2 cycles per day.
Tantalite concentrate will be packed into 205 L drums, sealed and exported via Fremantle in standard
shipping containers.
The Port of Esperance (the Port) is under the management of Southern Ports Authority and is the ocean-
borne export and import hub for the south-eastern corner of Western Australia. Besides mineral exports,
such as lithium, nickel and iron ore products and concentrates, it handles woodchip, agricultural,
hydrocarbon and industrial produce and materials.
It is anticipated that bulk haulage will be from the Bald Hill mine to a storage shed at Esperance, not at
the port, or full containers would be stored at the Esperance port after being loaded on site. During ship
loading Rotabox/Rotainer containers will be ferried back and forth to the ship loading crane from an off
port bulk storage site or from the full container stack at the port.
Sales/Marketing/ Pricing
Lithium
The Company has a binding offtake agreement for the supply of lithium concentrate from the Bald Hill
Project in Western Australia over an approximate initial five-year term.
The key terms of the offtake agreement are as follows(refer further to the Company?s ASX announcement
of 26 April 2017):
     -    A fixed price for all production for 2018 and 2019 of US$880/t (FOB Esperance) for 6% Li2O with
          price adjustment increment/decrement of US$15/t based on grade variation of 0.1%.
     -    From 2020 to 2023, the sales price and volumes are to be negotiated and agreed based upon
          prevailing market conditions at the time.
For the purpose of this feasibility study the following prices have been used from 2020.
Tantalum
The commodity pricing for tantalum is based on a price of US$60/lb (FOB Fremantle) for +25% Ta2O5. The
assumed spot price is $55/lb and a premium (based on historical sales from Bald Hill) of US$5/lb has been
assumed due to the low radiation and past sales history from the Bald Hill Mine.

Tenure
All mining and processing activities will be contained on granted Mining Lease M15/400 and eight associated
Miscellaneous Licences L15/264 to L15/270 and L15/348 all held 100% by Alliance Mineral Assets Limited
and part of a larger tenement package. M15/400 was granted in 1988 and it 2nd extension of term will
expire 7 September 2030, it pre-dates Native Title and has been the subject of prior mining and production.
Apart from state government royalties, M15/400 is not subject to royalties.
In the later years a Miscellaneous Licence will be required for the extension of waste dumps onto the
current E15/1212 also held 100% by Alliance Minerals Assets Limited.

Environmental Review, Project Approvals and Heritage

To reinstate mining operations at the Bald Hill Mine, a series of permits are required. The most important
of these include:

Department of Environmental Regulation (DER) - Licence Amendment
Since Bald Hill already has an Environmental operating Licence (for tantalum mining and processing) there
is not a requirement to go through a lengthy approval process. And, since the nature of the proposed
lithium mining and processing also fits with the current licence scope, there is also not a requirement for
a works approval. Thus an application has been submitted for an amendment to the existing operating
licence.

Due to the increased throughput, a new Tails Storage Facility (TSF) will be required once the approved TSF
is full, this will require a separate approval at a later date.
Department of Mines and Petroleum (DMP) ? Environmental Branch Mining Proposal
The Bald Hill site already has an approved mining proposal for tantalum mining and processing, issued by
the Environmental branch of the DMP. An updated application was submitted which has now been
approved. The updated mining proposal includes the new DMS plant and all the new infrastructure required
to operate the Lithium project, excluding then final Pit design.
The final pit design is not required to commence lithium mining and processing on site.
When the final pit design is determined another submission will be made to include the new pits etc. in
the mining proposal, and the final mine closure plan will also be submitted.
Department of Mines and Petroleum (DMP) Environmental Branch -Clearing of native vegetation
Bald Hill already has a clearing permit for its tantalum mining and processing. A new application will be
made for any works to be undertaken outside the current approved clearing area.
Department of Mines and Petroleum (DMP) Safety Branch - Project Management Plan (PMP)
The current approved PMP (for tantalum mining and processing) has been updated and resubmitted and
has been approved. The updated PMP now includes all Construction activities planned for site. A further
update of the PMP to cover the recommencement of mining operations will be submitted once the Mining
and Crushing contractors are identified.
Project Delivery Schedule
The key milestone dates are as follows:
Table 15: Project Delivery Timeline
 Construction mobilisation            June 2017

 Construction commencement            July 2017
 Mining mobilisation                  October 2017

 Mining commencement                  November 2017
 Crushing mobilisation                December 2017
 Crushing commencement                January 2018

 Ore commissioning                    February 2018


Study Team
The PFS was completed by Tawana with the assistance of a group of highly experienced consultants and
contractors. The main areas of focus and responsible contributors are detailed below:

   -   Primero Group                        Lithium Process Plant Design, Capital and Operating Cost
   -   Lithium Metallurgical Work           Nagrom and Trinol Pty Ltd
   -   Mining Study                         Marcus Jacobs and Mark Gell
   -   Logistics                            GDC Services Pty Ltd
   -   Geotechnical                         Dempers & Seymour Pty Ltd
   -  Tailings Storage Facility             Klohn Crippen Berger Ltd
   -   Environmental Studies                Ecotech (WA) Pty Ltd
   -   Resource Estimation                  CSA Global Pty Ltd

Opportunities For Growth

Several opportunities for increasing production rates and the mine life;
   -   Flotation test work to date shows potential for significant lithium recoveries from the -1mm Fines
       and DMS middlings stockpiles which will contain about 25% of mined lithium. Additional
       optimisation test work is being undertaken prior to further engineering. If constructed the LFC will
       have a very low unit cost due to the fact that mining and crushing costs have been carried by the
       DMS concentrate operating costs and the fact that its incremental production requiring limited
       additional manning and overheads. The lithium fines circuit throughput would be in the order of
       350,000tpa to 600,000tpa subject to allowances for potential increases to DMS throughput.
   -   The test work done on the composite sample and the 5 tonne bulk sample showed a significant
       tantalum content within the -5.6mm DMS concentrate. A jig test was done on the larger sample
       showed a significant portion of the contained tantalum could be recovered to concentrate. Further
       work is required to optimise the extraction of the tantalum without impacting lithium recoveries
       to primary concentrates.
   -   Infill drilling on the current additional Inferred Resources of 8.2Mt at 1.14% Li2O is expected to add
       significantly to the mine life based on scoping optimisations on both Indicated and Inferred
       Resources.
   -   Mining currently accounts for more than 50% of cash costs. It is likely that larger mining equipment
       will be selected for bulk waste mining and when final pit limits are determined in pit waste rock
       disposal into earlier pit stages will be adopted to reduce haul distances. Larger equipment and in
       pit waste disposal is expected to reduce unit mining unit costs.
   -   Extensional drilling is continuing to expand the known mineralised pegmatite footprint and the
       exploration potential is significant.

Financing

Tawana has sufficient funds available to meet the requirements of the first A$12.5m of capital. In addition:
   -   Tawana and its joint venture partner AMAL have secured a A$25m prepayment (refer ASX
       announcement on 26 April 2017), of which $7.5m has been received to date.
   -   The remaining capital is modest and is shared 50% each amongst Tawana and AMAL. Tawana?s board
       believes funding requirements for the Project are modest in relation to the Company's current
       market capitalisation.
   -   The funding requirements for the Project are low and the payback is rapid.
   -   Tawana is already in early stage discussions with many potential financiers, the details of which
       will be disclosed when financing has been agreed and as required by applicable exchange and
       securities laws. No binding agreements for funding have been signed to date.
   -   Tawana?s board has relevant experience in financing projects and further is finalising the services
       of an advisor to assist the Company to arrange project finance. The advisor worked for more than
       15 years with Macquarie Bank and is experienced in initiating and leading equity, quasi-equity,
       project finance for a broad range of resource projects.
   -   The production and economic outcomes delivered in the PFS are sufficiently robust to provide
       confidence in the Company?s ability to fund development of the Project through debt and/or equity
       financing.
   The Tawana Board believes that there are reasonable grounds that future funding will be available for
   the ongoing development of the Project, as envisaged in this announcement
   The Tawana Board cannot make any warranties or representations relating to any impediments in
   relation to the Joint VentureA, its formation and AMAL?s funding capability.

Competent Persons Statement

Exploration

The information in this announcement that relates to Exploration Results is based on and fairly represents information and supporting
documentation compiled by Mr Mark Calderwood, who is an employee of Tawana Resources NL (?Tawana?). Mr Calderwood is a member
of The Australasian Institute of Mining and Metallurgy. Mr Calderwood has sufficient experience relevant to the style of mineralisation
under consideration and to the activity 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 Calderwood consents to the inclusion
in this report of the matters based on his information in the form and context in which it appears.
Mr Calderwood is a significant shareholder in Tawana. Mr Calderwood and Tawana do not consider these to constitute a potential conflict
of interest to his role as Competent Person. Mr Calderwood is not aware of any other relationship with Tawana which could constitute a
potential for a conflict of interest.

Reserves

The information in this announcement that relates to Ore Reserves is based on and fairly represents information and supporting
documentation compiled by Mr Mark Gell, a Competent Person who is a is a member of The Australasian Institute of Mining and Metallurgy.
Mr Gell is a full-time employee of Tawana Resources NL (?Tawana?).
Mr Gell has sufficient experience that is relevant to the type of deposit under consideration and to the activity 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 Gell consents to the inclusion in this report of the matters based on his information in the form and
context in which it appears.
Mr Gell is an employee of Tawana. Mr Gell is not aware of any other relationship with Tawana which could constitute a potential for a
conflict of interest.

Metallurgical

The information in this release that relates to metallurgy and metallurgical test work has been reviewed by Mr Noel O?Brien, FAusIMM,
MBA, B. Met Eng. Mr O?Brien is not an employee of the company, but is employed as a contract consultant. Mr O?Brien is a Fellow of the
Australasian Institute of Mining and Metallurgy, and he has sufficient experience with the style of processing response and type of deposit
under consideration, and to the activities undertaken, to qualify as a competent person as defined in the 2012 edition of the ?Australian
Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves?. Mr O?Brien consents to the inclusion in this report
of the contained technical information in the form and context as it appears.

Forward Looking Statement
This report may contain certain forward looking statements and projections regarding estimated, resources and reserves; planned
production and operating costs profiles; planned capital requirements; and planned strategies and corporate objectives. Such forward
looking statements/projections are estimates for discussion purposes only and should not be relied upon as representation or warranty,
express or implied, of Tawana Resources NL and/or Alliance Mineral Assets Limited. They are not guarantees of future performance and
involve known and unknown risks, uncertainties and other factors many of which are beyond the control of Tawana Resources NL and/or
Alliance Mineral Assets Limited. The forward looking statements/projections are inherently uncertain and may therefore differ materially
from results ultimately achieved.
Tawana Resources NL and/or Alliance Mineral Assets Limited does not make any representations and provides no warranties concerning
the accuracy of the projections, and disclaims any obligation to update or revise any forward looking statements/projects based on new
information, future events or otherwise except to the extent required by applicable laws. While the information contained in this report
has been prepared in good faith, neither Tawana Resources NL and/or Alliance Mineral Assets Limited or any of their directors, officers,
agents, employees or advisors give any representation or warranty, express or implied, as to the fairness, accuracy, completeness or
correctness of the information, opinions and conclusions contained in this presentation. Accordingly, to the maximum extent permitted
by law, none of Tawana Resources NL and/or Alliance Mineral Assets Limited, their directors, employees or agents, advisers, nor any
other person accepts any liability whether direct or indirect, express or limited, contractual, tortuous, statutory or otherwise, in respect
of, the accuracy or completeness of the information or for any of the opinions contained in this announcement or for any errors, omissions
or misstatements or for any loss, howsoever arising, from the use of this announcement.



ENDNOTES

    A.     Through Tawana?s 100% owned subsidiary Lithco No. 2 Pty Ltd (Lithco), Tawana entered into a Farm-In Agreement on 23 February 2017
           with AMAL with respect to the Bald Hill Project for the purpose of joint exploration and exploitation of lithium and other minerals. In
           May 2017, Tawana earned its 50% rights to all lithium minerals from the tenements comprising the Project, and Tawana and AMAL are
           now governed by the Lithium Rights Joint Venture Agreement which was entered into on 10 April 2017.
           Tawana is required to spend $12.5 million in capital expenditure for upgrading and converting the existing plant on the Bald Hill
           tenements for processing ore derived from the Project, infrastructure costs, pre-stripping activities and other expenditures including
           operating costs (Capital Expenditure) by 31 December 2019.
        Upon completion of the Capital Expenditure, Tawana (through Lithco) will be entitled to a 50% interest in the Project (being all
        minerals from the tenements and the processing plant and infrastructure at Bald Hill). The portfolio of mineral tenements, comprising
        mining leases, exploration licences, prospecting licences, miscellaneous licences, a general-purpose lease, and a retention lease are in
        good standing.
        AMAL and Lithco entered into the Bald Hill Joint Venture Agreement (?Bald Hill JVA?) on 18 April 2017. The Bald Hill JVA has not come
        into effect as at the date of this announcement, but will take effect upon completion of the Capital Expendtiure.
        Tawana raised $15 million before costs, in May 2017, in order to fund its $12.5 million Capital Expenditure commitment to earn its 50%
        interest in the Project.
   B.   C1 cash costs as set by Wood Mackensie Co which includes all production costs, administration and transport to Esperance port.
   C.   For more information on the Resource estimate, refer to ASX announcement dated 14 June 2017. Tawana is not aware of any new
        information or data that materially affects the information included in the said announcement.
   D.   Refer metallurgical test work ASX Announcement on 7 April 2017.



11 July 2017

Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
APPENDIX
JORC Table 1

Mineral Resources JORC Reporting:

Section 1 Sampling Techniques and Data


  Criteria       JORC Code Explanation                                  Commentary
  Sampling       Nature and quality of sampling (e.g. cut channels,     Drilling consists of ~98% reverse circulation (RC), RC with
  techniques     random chips, or specific specialised industry         diamond core tails (RCD) and diamond drilling (DD) for a
                 standard measurement tools appropriate to the          total 728 holes for 63,539.2m of drilling in the Bald Hill
                 minerals under investigation, such as down hole        project database. The Bald Hill Mineral Resource is based
                 gamma sondes, or handheld XRF instruments,             on assay data from 460 RC holes, 9 RCD holes and 3 DD
                 etc.). These examples should not be taken as           holes.
                 limiting the broad meaning of sampling.
                                                                        RC cuttings were continuously sampled at 1m intervals
                                                                        through all pegmatite intercepts including 2m of waste
                                                                        above and below each intercept.

                                                                        DD core is typically continuously sampled at 2m intervals
                                                                        through pegmatite intercepts. Where required by
                                                                        changes in lithology, mineralization, or alteration, core
                                                                        samples may be shorter or longer than the typical 2m.

                 Include reference to measures taken to ensure          The majority of drill hole collars are accurately surveyed
                 sample representivity and the appropriate              using RTK DGPS equipment.
                 calibration of any measurement tools or systems
                                                                        Drill samples are logged for lithology, weathering,
                 used.
                                                                        structure (diamond core), mineralogy, mineralisation,
                                                                        colour and other features.

                                                                        Half diamond core was collected and placed in marked
                                                                        plastic sacks, and shipped to the assay laboratory.

                                                                        RC samples were collected and placed in marked plastic
                                                                        bags which were placed in sacks and then shipped to the
                                                                        assay laboratory.

                 Aspects of the determination of mineralisation         Drill samples were jaw crushed and riffle split to 2-2.5kg
                 that are Material to the Public Report. In cases       for pulverizing to 80% passing 75 microns. Prepared
                 where ?industry standard? work has been done this      samples are fused with sodium peroxide and digested in
                 would be relatively simple (e.g. ?reverse              dilute hydrochloric acid. The resultant solution is
                 circulation drilling was used to obtain 1 m samples    analysed by ICP, by Nagrom Laboratory in Perth.
                 from which 3 kg was pulverised to produce a 30 g
                                                                        The assay technique is considered to be robust as the
                 charge for fire assay?). In other cases more
                                                                        method used offers total dissolution of the sample and is
                 explanation may be required, such as where there
                                                                        useful for mineral matrices that may resist acid
                 is coarse gold that has inherent sampling
                                                                        digestions.
                 problems. Unusual commodities or mineralisation
                 types (e.g. submarine nodules) may warrant
                 disclosure of detailed information.

  Drilling       Drill type (e.g. core, reverse circulation, open-      RC was drilled using 4.5-inch (140 mm) rods with a
  techniques     hole hammer, rotary air blast, auger, Bangka,          nominal 5.9-inch (150 mm) diameter hole. Diamond core
                 sonic, etc.) and details (e.g. core diameter, triple   used either PQ, NQ2 or HQ3 diameter core. Core was
                 or standard tube, depth of diamond tails, face-        oriented where possible.
                 sampling bit or other type, whether core is
                                                                        All DD holes and ~98% of RC drill holes are angled; the
                 oriented and if so, by what method, etc.).
                                                                        remainder were drilled vertically.

  Drill sample   Method of recording and assessing core and chip        Chip recovery or weights for RC drilling were not
  recovery       sample recoveries and results assessed.                recorded. Core recovery is very good through the
                                                                        mineralised zones and estimated to be greater than 90%.
Criteria         JORC Code Explanation                                  Commentary
                 Measures taken to maximise sample recovery and         RC drilling generally utilised an external booster to keep
                 ensure representative nature of the samples.           samples dry and maximising recoveries. The majority of
                                                                        RC holes are shallow (<150m) with very few wet samples
                                                                        encountered.

                 Whether a relationship exists between sample           No relationship between grade and recovery has been
                 recovery and grade and whether sample bias may         identified.
                 have occurred due to preferential loss/gain of
                 fine/coarse material.

Logging          Whether core and chip samples have been                Geological logs exist for all drill holes with lithological
                 geologically and geotechnically logged to a level of   codes via an established reference legend.
                 detail to support appropriate Mineral Resource
                                                                        Drill samples were logged for lithology, weathering,
                 estimation, mining studies and metallurgical
                                                                        structure (diamond core), mineralogy, mineralisation,
                 studies.
                                                                        colour and other features. Logging and sampling has been
                                                                        carried out to ?industry norms? to a level sufficient to
                                                                        support the Mineral Resource estimate.

                 Whether logging is qualitative or quantitative in      Drill holes have been geologically logged in their
                 nature. Core (or costean, channel, etc.)               entirety. Where logging was detailed, the subjective
                 photography.                                           indications of spodumene content were estimated and
                                                                        recorded.

                 The total length and percentage of the relevant        All drill holes are logged in full, from start to finish of the
                 intersections logged.                                  hole.

Sub-sampling     If core, whether cut or sawn and whether quarter,      Where sampled, core is cut in half onsite using an
techniques       half or all core taken.                                industry standard core saw, to produce two identical
and sample                                                              halves.
preparation
                 If non-core, whether riffled, tube sampled, rotary     Dry RC samples were collected at 1m intervals and riffle
                 split, etc. and whether sampled wet or dry.            or cone split on-site to produce a subsample less than
                                                                        5kg.

                 For all sample types, the nature, quality and          Sample preparation is according to industry standard,
                 appropriateness of the sample preparation              including oven drying, coarse crush, and pulverisation to
                 technique.                                             80% passing 75 microns.

                 Quality control procedures adopted for all sub-        Subsampling is performed during the preparation stage
                 sampling stages to maximise representivity of          according to the assay laboratories? internal protocol.
                 samples.

                 Measures taken to ensure that the sampling is          Field duplicates, laboratory standards and laboratory
                 representative of the in situ material collected,      repeats are used to monitor analyses.
                 including for instance results for field
                 duplicate/second-half sampling.

                 Whether sample sizes are appropriate to the grain      Sample sizes are considered to be appropriate and
                 size of the material being sampled.                    correctly represent the style and type of mineralisation.

Quality of       The nature, quality and appropriateness of the         The assay technique is considered to be robust as the
assay data and   assaying and laboratory procedures used and            method used offers total dissolution of the sample and is
laboratory       whether the technique is considered partial or         useful for mineral matrices that may resist acid
tests            total.                                                 digestions.

                 For geophysical tools, spectrometers, handheld         None were used.
                 XRF instruments, etc., the parameters used in
                 determining the analysis including instrument
                 make and model, reading times, calibrations
                 factors applied and their derivation, etc.
Criteria          JORC Code Explanation                                  Commentary
                  Nature of quality control procedures adopted (e.g.     Standards and duplicates were submitted in varying
                  standards, blanks, duplicates, external laboratory     frequency throughout the exploration campaign and
                  checks) and whether acceptable levels of accuracy      internal laboratory standards, duplicates and replicates
                  (i.e. lack of bias) and precision have been            are used for verification.
                  established.

Verification of   The verification of significant intersections by       Significant intersections have been verified by
sampling and      either independent or alternative company              alternative TAW personnel and by a CSA Global
assaying          personnel.                                             Competent Person (Ralph Porter).

                                                                         The Ta and Li assays show a marked correlation with the
                                                                         pegmatite intersections via elevated downhole grades.

                  The use of twinned holes.                              Twinning of holes undertaken to date show reasonable
                                                                         continuity and representivity of the mineralised
                                                                         intervals.

                  Documentation of primary data, data entry              Drill logs exist for all holes as electronic files and/or
                  procedures, data verification, data storage            hardcopy (all 2017 logging has been input directly to field
                  (physical and electronic) protocols.                   logging computers).

                                                                         Digital log sheets have been created with inbuilt
                                                                         validations to reduce potential for data entry errors.

                                                                         All drilling data has been loaded to a database and
                                                                         validated prior to use.

                  Discuss any adjustment to assay data.                  For the Mineral Resource estimate, adjustments were
                                                                         made to a number of down hole surveys. These
                                                                         adjustments were made where angled holes were
                                                                         blocked well before the end of hole, or where down hole
                                                                         surveys had not yet been undertaken but surveys had
                                                                         been completed for nearby holes.

                                                                         Where the drill hole was blocked, the last survey was
                                                                         copied to the end of hole depth. Where no down hole
                                                                         survey was completed or the hole was blocked at surface,
                                                                         the down hole surveys from a nearby hole, drilled by the
                                                                         same rig (and preferably same driller), was copied and
                                                                         applied to the hole. Some of these holes may need to be
                                                                         re-entered, cleaned and surveyed in the future. All
                                                                         changes were marked as ?nominal? in the database.

                                                                         In all cases, corrections to down hole surveys were
                                                                         reviewed against surrounding drill holes and pegmatite
                                                                         intervals to ensure error was minimised.

Location of       Accuracy and quality of surveys used to locate drill   Prior to drilling, collar coordinates are situated using
data points       holes (collar and down-hole surveys), trenches,        hand held GPS (considered accurate to within 4m).
                  mine workings and other locations used in Mineral      Following drilling, accurate surveying using RTK DGPS is
                  Resource estimation.                                   undertaken by trained site personnel.

                                                                         Hole collars are preserved until completion of down hole
                                                                         surveying. A significant portion of holes are surveyed
                                                                         down hole digital instruments dominated by gyro tools.

                  Specification of the grid system used.                 Grid used is MGA 94 Zone 51.

                  Quality and adequacy of topographic control.           Topographical survey is generated from detailed airborne
                                                                         survey with points generated on a 1m by 1m grid. Areas
                                                                         mined have been defined by final mine surveys.
Criteria         JORC Code Explanation                                  Commentary
Data spacing     Data spacing for reporting of Exploration Results.     Drilling has been conducted on a 40m by 40m grid
and                                                                     extending to 80m by 80m on the peripheries of the
distribution                                                            deposit, with a 140m by 80m area in the northern portion
                                                                        of the deposit drilled out at 20m by 20m.

                 Whether the data spacing and distribution is           The spacing of holes is considered of sufficient density to
                 sufficient to establish the degree of geological and   provide an ?Indicated? or ?Inferred? Mineral Resource
                 grade continuity appropriate for the Mineral           estimation and classification under JORC (2012).
                 Resource and Ore Reserve estimation procedure(s)
                 and classifications applied.

                 Whether sample compositing has been applied.           There has been no sample compositing.

Orientation of   Whether the orientation of sampling achieves           Drilling has been angled to achieve the most
data in          unbiased sampling of possible structures and the       representative intersections through mineralisation.
relation to      extent to which this is known, considering the
                                                                        The majority of drilling is angled. Some vertical holes
geological       deposit type.
                                                                        have been drilled in areas where access is limited or the
structure
                                                                        pegmatites are interpreted to be flat lying.

                 If the relationship between the drilling orientation   The lithium tantalite-bearing pegmatites are generally
                 and the orientation of key mineralised structures      flat to shallowly dipping in nature. The true width of
                 is considered to have introduced a sampling bias,      pegmatites is generally considered 80-95% of the
                 this should be assessed and reported if material.      intercept width, with minimal opportunity for sample
                                                                        bias.

Sample           The measures taken to ensure sample security.          The drill samples are taken from the rig by experienced
security                                                                personnel, stored securely and transported to the
                                                                        laboratory by a registered courier and handed over by
                                                                        signature.

Audits or        The results of any audits or reviews of sampling       No audits have been undertaken to date.
reviews          techniques and data.
Section 2 Reporting of Exploration Results


 Criteria        Explanation                                           Commentary

 Mineral         Type, reference name/number, location and             The Bald Hill Resource is situated on Mining lease
 tenement and    ownership including agreements or material issues     M15/400 comprising 501Ha. M 15/400 is 100% owned by
 land tenure     with third parties such as joint ventures,            Australian incorporated, Singapore Exchange listed
 status          partnerships, overriding royalties, native title      Alliance Mineral Assets Limited (AMAL).
                 interests, historical sites, wilderness or national
                                                                       The Mining lease are subject to an earn-in agreement
                 park and environmental settings.
                                                                       between AMAL and Tawana Resources Limited.

                                                                       There are no other third-party interests or royalties.
                                                                       Government royalties are 5% for Lithium or Tantalum
                                                                       mineral concentrates.

                 The security of the tenure held at the time of        The portfolio of mineral tenements, comprising mining
                 reporting along with any known impediments to         leases, exploration licences, prospecting licences,
                 obtaining a licence to operate in the area.           miscellaneous licences, a general-purpose lease, and a
                                                                       retention lease are in good standing.

 Exploration     Acknowledgment and appraisal of exploration by        Alluvial tantalite has been mined periodically from the
 done by other   other parties.                                        early 1970s.
 parties
                                                                       Gwalia Consolidated Limited undertook exploration for
                                                                       tantalite-bearing pegmatites from 1983-1998. Work
                                                                       included mapping, costeaning, and several phases of
                                                                       drilling using RAB, RC, and diamond methods. The work
                                                                       identified mineral resources that were considered
                                                                       uneconomic at the time.

                                                                       Haddington Resources Limited (Haddington) entered
                                                                       agreement to develop the resource and mining
                                                                           -   commenced in 2001 and continued until 2005.
                                                                           -   Haddington continued with exploration until
                                                                                2009.
                                                                       Living Waters acquired the project in 2009 and continued
                                                                       with limited exploration to the north of the main pit
                                                                       area.

 Geology         Deposit type, geological setting and style of         The Bald Hill area is underlain by generally north-
                 mineralisation.                                       striking, steeply dipping Archaean metasediments
                                                                       (schists and greywackes) and granitoids.

                                                                       Felsic porphyries and pegmatite sheets and veins have
                                                                       intruded the Archaean rocks. Generally, the pegmatites
                                                                       cross cut the regional foliation, occurring as gently
                                                                       dipping sheets and as steeply dipping veins.

                                                                       The pegmatites vary in width and are generally
                                                                       comprised quartz-albite- muscovite-spodumene in
                                                                       varying amounts. Late-stage albitisation in the central
                                                                       part of the main outcrop area has resulted in fine-
                                                                       grained, banded, sugary pegmatites with visible fine-
                                                                       grained, disseminated tantalite. A thin hornfels
                                                                       characterised by needle hornblende crystals is often
                                                                       observed in adjacent country rocks to the pegmatite
                                                                       intrusives. Tantalite generally occurs as fine
                                                                       disseminated crystals commonly associated with fine-
                                                                       grained albite zones, or as coarse crystals associated
                                                                       with cleavelandite.

                                                                       Weathering of the pegmatites yields secondary
                                                                       mineralised accumulations in alluvial/elluvial deposits.
Criteria         Explanation                                             Commentary

Drill hole       A summary of all information material to the            Not Applicable ? Not reporting exploration results.
Information      understanding of the exploration results including
                 a tabulation of the following information for all
                 Material drill holes:

                     ?   easting and northing of the drill hole collar

                     ?   elevation or RL (Reduced Level ? elevation
                         above sea level in metres) of the drill hole
                         collar

                     ?   dip and azimuth of the hole

                     ?   down hole length and interception depth

                     ?   hole length.

                 If the exclusion of this information is justified on    Not Applicable ? Not reporting exploration results.
                 the basis that the information is not Material and
                 this exclusion does not detract from the
                 understanding of the report, the Competent
                 Person should clearly explain why this is the case.

Data             In reporting Exploration Results, weighting             Not Applicable ? Not reporting exploration results.
aggregation      averaging techniques, maximum and/or minimum
methods          grade truncations (e.g. cutting of high grades) and
                 cut-off grades are usually Material and should be
                 stated.

                 Where aggregate intercepts incorporate short            Not Applicable ? Not reporting exploration results.
                 lengths of high grade results and longer lengths of
                 low grade results, the procedure used for such
                 aggregation should be stated and some typical
                 examples of such aggregations should be shown in
                 detail.

                 The assumptions used for any reporting of metal         Not Applicable ? Not reporting exploration results.
                 equivalent values should be clearly stated.

Relationship     These relationships are particularly important in       Not Applicable ? Not reporting exploration results.
between          the reporting of Exploration Results.
mineralisation
                 If the geometry of the mineralisation with respect      The majority of drilling is angled. Some vertical holes
widths and
                 to the drill hole angle is known, its nature should     have been drilled in areas where access is limited or the
intercept
                 be reported.                                            pegmatites are interpreted to be flat lying.
lengths
                                                                         The lithium tantalite-bearing pegmatites are generally
                                                                         flat to shallowly dipping in nature. The true width of
                                                                         pegmatites are generally considered 85-95% of the
                                                                         intercept width, with minimal opportunity for sample
                                                                         bias.

                 If it is not known and only the down hole lengths       Not Applicable ? Not reporting exploration results.
                 are reported, there should be a clear statement to
                 this effect (e.g. ?down hole length, true width not
                 known?).

Diagrams         Appropriate maps and sections (with scales) and         Not Applicable ? Not reporting exploration results
                 tabulations of intercepts should be included for
                 any significant discovery being reported These
                 should include, but not be limited to a plan view
                 of drill hole collar locations and appropriate
                 sectional views.
Criteria       Explanation                                           Commentary

Balanced       Where comprehensive reporting of all Exploration      Not Applicable ? Not reporting exploration results
reporting      Results is not practicable, representative
               reporting of both low and high grades and/or
               widths should be practiced to avoid misleading
               reporting of Exploration Results.

Other          Other exploration data, if meaningful and             The metallurgical test work for spodumene referred to in
substantive    material, should be reported including (but not       the release was undertaken by Nagrom. Nagrom has
exploration    limited to): geological observations; geophysical     extensive experience with tantalum and lithium
data           survey results; geochemical survey results; bulk      extraction testwork and has ISO9001:2008 accreditation.
               samples ? size and method of treatment;               Results have been reported without interpretation.
               metallurgical    test   results;  bulk    density,
               groundwater,       geotechnical      and     rock
               characteristics;    potential    deleterious    or
               contaminating substances.

Further work   The nature and scale of planned further work (e.g.    Further RC and diamond drilling is warranted at the
               tests for lateral extensions or depth extensions or   deposit to explore for additional resources and improve
               large-scale step-out drilling).                       the understanding of the current resources prior to
                                                                     mining.

               Diagrams clearly highlighting the areas of possible   Diagrams have been included in the body of this report.
               extensions, including the main geological
               interpretations and future drilling areas, provided
               this information is not commercially sensitive.
Section 3 Estimation and Reporting of Mineral Resources
(Criteria listed in the preceding section also apply to this section)


  Criteria         Explanation                                              Commentary

  Database         Measures taken to ensure that data has not been          Logging is completed onto templates using standard
  integrity        corrupted by, for example, transcription or keying       logging codes into Toughbook laptops. Analytical results
                   errors, between its initial collection and its use for   are imported directly into the database by a database
                   Mineral Resource estimation purposes.                    specialist.

                                                                            The central database, from which the extract used for
                                                                            Mineral Resource estimation was taken, is managed by
                                                                            Tawana. Upon receipt of the extract, CSA Global
                                                                            validated the database for internal integrity as part of
                                                                            the import process for modelling in Surpac.

                   Data validation procedures used.                         Data were validated for internal database integrity as
                                                                            part of the import process for use in Surpac. This includes
                                                                            logical integrity checks for data beyond the hole depth
                                                                            maximum, and overlapping from-to errors within interval
                                                                            data. Visual validation checks were also made for
                                                                            obviously spurious collar or downhole survey values,
                                                                            collars which were not assigned a proper RL value, and
                                                                            collars which may lack substantial downhole survey data.

  Site visits      Comment on any site visits undertaken by the             CSA Global Principal Consultant; Ralph Porter has visited
                   Competent Person and the outcome of those visits.        site and reviewed the drilling, sample collection, and
                                                                            logging data collection procedures, along with
                                                                            conducting a review of the site geology.

                                                                            The outcome of the site visits (broadly) were that data
                                                                            has been collected in a manner that supports reporting a
                                                                            Mineral Resource estimate in accordance with the JORC
                                                                            Code, and controls to the mineralisation are well-
                                                                            understood.

                   If no site visits have been undertaken indicate why      Not Applicable.
                   this is the case.

  Geological       Confidence in (or conversely, the uncertainty of )       The geological model developed is based on lithological
  interpretation   the geological interpretation of the mineral             logging of pegmatites within a metasedimentary host,
                   deposit.                                                 with occasional hypabyssal intrusions of dioritic
                                                                            composition. The deposit geology is very well understood
                                                                            based on previous mining history and open pit exposures,
                                                                            and this is reflected in the generally high confidence in
                                                                            both the mineralisation and geological interpretations.

                   Nature of the data used and of any assumptions           The input data used for geological modelling has been
                   made.                                                    derived from the qualitative and quantitative logging of
                                                                            lithology, alteration, geochemical composition of
                                                                            samples returned from RC and DD drilling.

                   The effect, if any, of alternative interpretations       The geological model developed has a solid lithological
                   on Mineral Resource estimation.                          basis, and is controlled by the presence of visually
                                                                            distinct pegmatite within drillholes. Pegmatite
                                                                            structures have been modelled as predominantly low
                                                                            angle / sub-horizontal structures on the basis of a high
                                                                            density of input drillhole data and confirmation of the
                                                                            interpretation on the basis of mapping. The data do not
                                                                            readily lend themselves to alternative interpretations,
                                                                            and it is unlikely that such alternatives would yield a
                                                                            more geologically reasonable result.
Criteria         Explanation                                          Commentary

                 The use of geology in guiding and controlling        The model developed for mineralisation is geologically
                 Mineral Resource estimation.                         driven; controlled by the presence or absence of
                                                                      pegmatite.

                 The factors affecting continuity both of grade and   Geological continuity is controlled by the preference for
                 geology.                                             fractionated pegmatitic fluids to follow preferential
                                                                      structural pathways through the host rocks (an
                                                                      intercalated pile of metasediments and metavolcanics.
                                                                      Grade within this pegmatite is controlled by numerous
                                                                      factors such as fluid residence time, degree of fluid
                                                                      fractionation and pegmatite thickness.

Dimensions       The extent and variability of the Mineral Resource   The Bald Hill Mineral Resource comprises one large,
                 expressed as length (along strike or otherwise),     main, sub horizontal pegmatite body, striking north-
                 plan width, and depth below surface to the upper     south, with a strike length of 1,070m, and a width at its
                 and lower limits of the Mineral Resource.            widest point of 775m. This main body is surrounded by
                                                                      several smaller discrete pegmatite bodies, sub-parallel
                                                                      to the main, which result in a total strike length for the
                                                                      whole resource of 1,245m, and a total width of 990m.
                                                                      The Mineral Resource has a total vertical depth of 195m,
                                                                      beginning 20m below the natural surface and plunging
                                                                      gently to the south along its entire strike length.

Estimation and   The nature and appropriateness of the estimation     The Bald Hill Mineral Resource has been estimated using
modelling        technique(s) applied and key assumptions,            ordinary Kriging in a Surpac block model. The variables
techniques       including treatment of extreme grade values,         Li2O ppm and Ta2O5ppm were estimated independently
                 domaining,     interpolation   parameters    and     in a univariate sense. The pegmatites on which this
                 maximum distance of extrapolation from data          Mineral Resource was defined was domained internally
                 points. If a computer assisted estimation method     on the basis of a 7,500ppm Li2O cut-off, which itself was
                 was chosen include a description of computer         determined from exploratory data analysis as a point of
                 software and parameters used.                        inflection within the Li2O grade distribution. This
                                                                      resulted in a high-grade core of Li2O mineralisation
                                                                      surrounded by lower grade pegmatite, and is an
                                                                      interpretation supported by the petrogenetic model for
                                                                      the formation of Li2O bearing pegmatites.

                                                                      Samples were composited to 1m intervals based on
                                                                      assessment of the raw drill hole sample intervals. Various
                                                                      high grade cuts were used for both Li2O (ranging from
                                                                      10,000ppm to 40,000ppm) and Ta2O5 (ranging from
                                                                      300mm to 4,000ppm) based on statistical review of each
                                                                      object. Composites for some objects remained uncut
                                                                      depending on the statistical review.

                                                                      High and low grade domains were estimated
                                                                      independently with hard boundaries assumed between
                                                                      domains. Parameters for estimation and search ellipsoids
                                                                      were determined from quantitative kriging analysis
                                                                      performed within the SupervisorTM software package,
                                                                      which was also used to define semivariogram models for
                                                                      each variable. The parameters defined for the largest,
                                                                      most populated domains (main mineralised body and its
                                                                      high-grade core) were used to inform all smaller
                                                                      subsidiary domains during estimation.

                                                                      A two search pass strategy was employed, with
                                                                      successive searches using more relaxed parameters for
                                                                      selection of input composite data, and a greater search
                                                                      radius. Blocks not informed for any given variable after
                                                                      two passes were assigned the Sichel Mean of the input
                                                                      data from that particular domain.
Criteria   Explanation                                           Commentary

                                                                 All geological modelling and grade estimation was
                                                                 completed using Surpac software.




           The availability of check estimates, previous         No check estimates are available for the current Mineral
           estimates and/or mine production records and          Resource. Historic estimates for the Bald Hill deposit
           whether the Mineral Resource estimate takes           focussed on Ta2O5 only, and as such are not directly
           appropriate account of such data.                     comparable to the current estimate for which Li2O is the
                                                                 primary target variable.

           The assumptions made regarding recovery of by-        The only significant by-product to be considered is Ta2O5
           products.                                             which has been estimated within the domains defined by
                                                                 Li2O.

           Estimation of deleterious elements or other non-      No deleterious elements have been identified or
           grade variables of economic significance (eg.         estimated.
           sulphur for acid mine drainage characterisation).

           In the case of block model interpolation, the block   Block model dimensions used for the Bald Hill Mineral
           size in relation to the average sample spacing and    Resource estimate were 10 by 10 by 5m (XYZ) sub-celled
           the search employed.                                  to 2.5 by 2.5 by 1.25m for resolution of volumes at
                                                                 lithological boundaries. This compares to an average
                                                                 drillhole spacing of 20m within the more densely
                                                                 informed areas of the deposit. This 20m spacing
                                                                 increases to up to 80m between drillholes in less well
                                                                 informed portions of the deposit.

                                                                 Kriging Neighbourhood Analysis (KNA) was conducted
                                                                 within the SupervisorTM software package to test a
                                                                 variety of block sizes in both well and poorly informed
                                                                 areas of the deposit. The chosen block size represents
                                                                 the smallest block size that yields a robust set of
                                                                 estimation statistics, which are comparable to the
                                                                 results also yielded from larger blocks sizes.

           Any assumptions behind modelling of selective         No assumptions were made regarding selective mining
           mining units.                                         units.

           Any assumptions     about   correlation   between     The two variables under consideration; Li2O and Ta2O5
           variables.                                            are uncorrelated within both the pegmatite as a whole,
                                                                 and within the high-grade domain (correlation
                                                                 coefficient of -0.04). Consequently, no correlation
                                                                 between variables was considered. Both variables were
                                                                 treated in a univariate sense.

           Description of how the geological interpretation      The nature of the mineralised body is such that the
           was used to control the resource estimates.           definition of the pegmatite host also defines the
                                                                 mineralisation. Within that, and based on a combination
                                                                 of petrogenetic process and statistical appraisal, an
                                                                 internal high-grade Li2O domain was defined.

           Discussion of basis for using or not using grade      Domained data for both variables were assessed using
           cutting or capping.                                   histogram and log probability plots to define potential
                                                                 top cuts to data. Where the Competent Person observed
                                                                 likely breaks in the continuity of the grade distributions,
Criteria         Explanation                                            Commentary
                                                                        a top cut was chosen and applied. This was conducted on
                                                                        a per-domain basis.

                 The process of validation, the checking process        The results of estimation into the block model for the
                 used, the comparison of model data to drill hole       Bald Hill Mineral resource were validated visually and
                 data, and use of reconciliation data if available.     statistically. Estimated block grades were compared
                                                                        visually in section against the corresponding input data
                                                                        values. Additionally, trend plots of input data and block
                                                                        estimates were compared for swaths generated in each
                                                                        of the three principal geometric orientations (northing,
                                                                        easting and elevation).

Moisture         Whether the tonnages are estimated on a dry basis      Tonnages are reported on a dry basis.
                 or with natural moisture, and the method of
                 determination of the moisture content.

Cut-off          The basis of the adopted cut-off grade(s) or quality   Modelling of mineralisation for the resource was based
parameters       parameters applied.                                    on a combination of pegmatite lithological logging.
                                                                        Within this mineralisation shape, a higher grade core was
                                                                        defined on the basis of a 7,500 ppm Li2O cut-off.

                                                                        The Mineral Resource is reported using a 0.5% Li2O cut-
                                                                        off which approximates a conservative cut-off grade used
                                                                        for potential open pit mining as determined from
                                                                        preliminary pit optimisations.

Mining factors   Assumptions made regarding possible mining             The methods used to design and populate the Bald Hill
or assumptions   methods, minimum mining dimensions and internal        Mineral Resource block model were defined under the
                 (or, if applicable, external) mining dilution. It is   assumption that the deposit is likely to be mined via open
                 always necessary as part of the process of             pit methods.
                 determining reasonable prospects for eventual
                 economic extraction to consider potential mining
                 methods, but the assumptions made regarding
                 mining methods and parameters when estimating
                 Mineral Resources may not always be rigorous.
                 Where this is the case, this should be reported with
                 an explanation of the basis of the mining
                 assumptions made.

Metallurgical    The basis for assumptions or predictions regarding     The material targeted for extraction predominantly
factors or       metallurgical amenability. It is always necessary as   comprises the mineral spodumene, for which
assumptions      part of the process of determining reasonable          metallurgical processing methods are well established.
                 prospects for eventual economic extraction to          No specific detail regarding metallurgical assumptions
                 consider potential metallurgical methods, but the      have been applied in the estimation the current Mineral
                 assumptions regarding metallurgical treatment          Resource, however at the current level of detail
                 processes and parameters made when reporting           available, the Competent Person believes with sufficient
                 Mineral Resources may not always be rigorous.          confidence that metallurgical concerns will not pose any
                 Where this is the case, this should be reported with   significant impediment to eventual economic extraction.
                 an explanation of the basis of the metallurgical
                 assumptions made.

Environmental    Assumptions made regarding possible waste and          No assumptions have been made regarding waste
factors or       process residue disposal options. It is always         products, however the Mineral Resource has previously
assumptions      necessary as part of the process of determining        been mined by open pit methods with a processing
                 reasonable prospects for eventual economic             facility, stacked waste dumps and tailings storage
                 extraction to consider the potential environmental     facilities on site. It is reasonable to assume that in the
                 impacts of the mining and processing operation.        presence of this infrastructure, the creation and storage
                 While at this stage the determination of potential     of waste products on site will not be of concern for future
                 environmental impacts, particularly for a              mining activities.
                 greenfields project, may not always be well
                 advanced, the status of early consideration of
                 these potential environmental impacts should be
Criteria         Explanation                                           Commentary
                 reported. Where these aspects have not been
                 considered this should be reported with an
                 explanation of the environmental assumptions
                 made.

Bulk density     Whether assumed or determined. If assumed, the        In situ bulk densities for the Bald Hill Mineral Resource
                 basis for the assumptions. If determined, the         have been assigned on a lithological basis for both
                 method used, whether wet or dry, the frequency        mineralisation and waste, based on historical values
                 of the measurements, the nature, size and             derived from mining and values taken from those used in
                 representativeness of the samples.                    similar deposits and lithologies.

                                                                       The Competent Person considers the values chosen to be
                                                                       suitably representative.

                 The bulk density for bulk material must have been     Densities have been assigned on a lithological basis based
                 measured by methods that adequately account for       on a total of 44 metasediment and 25 pegmatite core
                 void spaces (vugs, porosity, etc), moisture and       samples measured at the Nagrom laboratory and values
                 differences between rock and alteration zones         derived from surrounding deposits and rock types.
                 within the deposit.

                 Discuss assumptions for bulk density estimates        Bulk densities have been applied on a lithological unit
                 used in the evaluation process of the different       basis. Values assigned were as follows:
                 materials.
                                                                           -    Fresh pegmatite mineralisation 2.65 t/m3
                                                                           -    Transitional pegmatite 2.5t/m3
                                                                           -    Fresh diorite 2.8t/m3
                                                                           -    Transitional diorite 2.6t/m3
                                                                           -    Fresh metasediments 2.74t/m3
                                                                           -    Transitional metasediments 2.6t/m3
                                                                           -    Oxide metasediments 2.2t/m3
                                                                           -    Waste fill 1.8t/m3

                                                                       additional bulk density testwork utilising drill core across
                                                                       the mineralised zones and less common waste units is
                                                                       recommended for future estimates.

Classification   The basis for the classification of the Mineral       The Mineral Resource has been classified as Indicated and
                 Resources into varying confidence categories.         Inferred on a qualitative basis; taking into consideration
                                                                       numerous factors such as drillhole spacing, estimation
                                                                       quality statistics (kriging slope of regression), number of
                                                                       informing samples used in the estimate, average distance
                                                                       to informing samples in comparison to the semivariogram
                                                                       model ranges, and overall coherence and continuity of
                                                                       the modelled mineralisation wireframes.

                 Whether appropriate account has been taken of all     The classification reflects areas of lower and higher
                 relevant factors (ie relative confidence in           geological confidence in mineralised lithological domain
                 tonnage/grade estimations, reliability of input       continuity based on the intersecting drill sample data
                 data, confidence in continuity of geology and         numbers, spacing and orientation. Overall mineralisation
                 metal values, quality, quantity and distribution of   trends are reasonably consistent within the various
                 the data).                                            lithology types over numerous drill sections.

                 Whether the result appropriately reflects the         The Mineral Resource estimate appropriately reflects the
                 Competent Person?s view of the deposit.               Competent Person?s views of the deposit.

Audits or        The results of any audits or reviews of Mineral       Internal audits were completed by CSA Global which
reviews          Resource estimates.                                   verified the technical inputs, methodology, parameters
                                                                       and results of the estimate.

                                                                       The current model has not been audited by an
                                                                       independent third party
  Criteria        Explanation                                            Commentary

  Discussion of   Where appropriate a statement of the relative          The Mineral Resource accuracy is communicated through
  relative        accuracy and confidence level in the Mineral           the classification assigned to the deposit. The Mineral
  accuracy/       Resource estimate using an approach or procedure       Resource estimate has been classified in accordance with
  confidence      deemed appropriate by the Competent Person. For        the JORC Code, 2012 Edition using a qualitative
                  example, the application of statistical or             approach. All factors that have been considered have
                  geostatistical procedures to quantify the relative     been adequately communicated in Section 1 and Section
                  accuracy of the resource within stated confidence      3 of this Table.
                  limits, or, if such an approach is not deemed
                  appropriate, a qualitative discussion of the factors
                  that could affect the relative accuracy and
                  confidence of the estimate.

                  The statement should specify whether it relates to     The Mineral Resource statement relates to a global
                  global or local estimates, and, if local, state the    estimate of in-situ tonnes and grade.
                  relevant tonnages, which should be relevant to
                  technical      and      economic        evaluation.
                  Documentation should include assumptions made
                  and the procedures used.

                  These statements of relative accuracy and              The deposit has been historically mined for tantalum
                  confidence of the estimate should be compared          (Ta2O5), however no accounting for Li2O had been
                  with production data, where available.                 undertaken, and therefore no production records are
                                                                         available for comparison to the current estimate.




Section 4 Estimation and Reporting of Ore Reserves (Criteria listed in the preceding section also apply to this
      section)


  Criteria        Explanation                                            Commentary
  Mineral         Description of the Mineral Resource estimate           The Mineral Resource estimate was completed by Dr
  Resource        used as a basis for the conversion to an Ore           Matthew Cobb and Mr Ralph Porter of CSA Global Pty Ltd
  estimate for    Reserve.                                               (CSA).
  conversion to
  Ore Reserves                                                           The Lithium Resources included:
                                                                         Indicated Resources of 4.6Mt at 1.25% Li2O and 207ppm
                                                                         Ta2O5; and
                                                                         Inferred Resources of 8.2Mt at 1.14% Li2O and 130ppm
                                                                         Ta2O5
                                                                         Additional Tantalum Resources included:
                                                                         Indicated Resources of 2.8Mt at 325ppm Ta2O5; and
                                                                         Inferred Resources of 2.9Mt at 297ppmm Ta2O5.
                  Clear statement as to whether the Mineral              The Mineral Resources are reported Inclusive of Ore
                  Resources are reported additional to, or inclusive     Reserves.
                  of, the Ore Reserves
  Site visits     Comment on any site visits undertaken by the           The Competent person, Mr Mark Gell, in his capacity as
                  Competent Person and the outcome of those              Registered Manager and Senior Mining Engineer has spent
                  visits.                                                significant time on the Bald Hill mine site over a period
                                                                         of 2 years. He has been involved with tantalum processing
                                                                         from existing tantalum plant and is familiar with most
                                                                         aspects of the site, logistics, infrastructure and mining
                                                                         issues.
                  If no site visits have been undertaken indicate        Not applicable
                  why this is the case.
  Study status    The type and level of study undertaken to              The study undertaken was a Pre-Feasibility Study (PFS).
                  enable Mineral Resources to be converted to Ore        The PFS was undertaken as the basis for conversion of
                  Reserves.                                              Indicated Resources to Probable Reserves. The study was
Criteria         Explanation                                           Commentary
                                                                       compiled by the Company with input from a number of
                                                                       independent consultants as follows:
                                                                              o Geology ? CSA
                                                                              o Mining ? CSA for Whittles, Design Marcus
                                                                                 Jacobs, Mark Gell
                                                                              o Metallurgical testing ? Nagrom
                                                                              o Metallurgy & Processing ?Trinol Pty Ltd and
                                                                                 Primero Group (Primero)
                                                                              o Infrastructure ? Klohn Crippen Berger Ltd
                                                                                 (KCB) and GDC Services Pty Ltd (GDC)
                                                                              o Environmental ? Ecotech (WA) Pty Ltd
                                                                                 (Ecotech)
                                                                              o Geotechnical ? Dempers & Seymour Pty Ltd
                                                                                 (Dempers & Seymour)


                 The Code requires that a study to at least Pre-       Mine planning included pit optimisations, pit designs,
                 Feasibility Study level has been undertaken to        mining and processing scheduling, cost estimations and
                 convert Mineral Resources to Ore Reserves. Such       economic analysis to ensure the project is technically
                 studies will have been carried out and will have      achievable and economically viable.
                 determined a mine plan that is technically
                 achievable and economically viable, and that
                 material Modifying Factors have been considered.      Capital expenditure estimates are considered to be
                                                                       within -5%/+10%, and
                                                                       Operational expenditure estimates are considered to be
                                                                       within -10%/+15%.
Cut-off          The basis of the cut-off grade(s) or quality          The economic parameters used in pit optimisation were
parameters       parameters applied.                                   used to define a breakeven cut-off grade of 0.39% Li2O
                                                                       or 200ppm Ta2O5.
Mining factors   The method and assumptions used as reported in        Pit optimisations, and sensitivity analysis, was
or               the Pre-Feasibility or Feasibility Study to convert   completed. Slope design criteria, mining dilution, ore
assumptions      the Mineral Resource to an Ore Reserve (i.e.          loss and processing recoveries were applied in the pit
                 either by application of appropriate factors by       optimisation process together with mining,
                 optimisation or by preliminary or detailed            processing, transport and sales cost estimates,
                 design).                                              and revenue projections to form the basis for pit
                                                                       designs and subsequent mining and processing
                                                                       schedules.




                 The choice, nature and appropriateness of the         A conventional open pit mine method was chosen as the
                 selected mining method(s) and other mining            basis of the PFS. Ore occurs close to surface requiring
                 parameters including associated design issues         minimal pre-stripping and pre- production mining
                 such as pre-strip, access, etc.                       activities.


                 The assumptions made regarding geotechnical           Dempers & Seymour carried out geotechnical logging of
                 parameters (eg pit slopes, stope sizes, etc),         5 specifically located core drill holes in the deeper
                 grade control and pre-production drilling.            portions of the proposed pit and initial evaluation of the
                                                                       data resulted in recommended inter-ramp slope angles
                                                                                           ?
                                                                       ranging from 48-55 .
                                                                       A running ramp widths for designs vary from 10m for
                                                                       single to 19.5m for double lane ramps for gross widths
                                                                       of 15m-25m.
                 The major assumptions made and Mineral                The Ore Reserve estimate for the PFS was based on the
                 Resource model used for pit and stope                 Mineral Resource, dated 14 June 2017, prepared by CSA.
                 optimisation (if appropriate).
                                                                       Major assumptions for pit optimisation include: for
                                                                       lithium 0.20% Li2O fixed tail and 100% recovery (also 70%
Criteria        Explanation                                          Commentary
                                                                     recovery with no fixed tail used). For tantalum recovery
                                                                     of 62%; ore production rate of 1.2Mtpa; DMS and 0.35Mt
                                                                     through the tantalum plant; Gross price of US$750/t 6%
                                                                     Li2O Conc (inclusive of transport). FOB and US$60/lb of
                                                                     contained tantalum within tantalum concentrates;
                                                                     Selling cost of 5% (State Government royalty); overall
                                                                     processing cost of A$29.06/t of lithium and tantalum ore
                                                                     inclusive of administration costs, ore rehandle, mine
                                                                     management, contract crushing, sustaining capital and
                                                                     grade control; and contract waste mining cost at surface
                                                                     of A$3.04/t mined. Site rehabilitation allowance of
                                                                     A$0.12/t of waste mined. A discount rate of 8% was
                                                                     applied.
                The mining dilution factors used.                    Mining dilution of 5% was nominally applied to Indicated
                                                                     Resources based on the highly visual nature of the ore
                                                                     and a subjective assessment of prior mining
                                                                     performance. A grade of 0.0% Li2O and 0ppm Ta205 was
                                                                     assumed for dilution material.


                The mining recovery factors used.                    A mining recovery of 95% was applied based on highly
                                                                     visual nature of ore and a subjective assessment of prior
                                                                     mining performance



                Any minimum mining widths used.                      Minimum mining width for optimisation and design was
                                                                     30m

                The manner in which Inferred Mineral Resources       Inferred Resources was included in several pit
                are utilised in mining studies and the sensitivity   optimisation runs to ensure infrastructure or waste was
                of the outcome to their inclusion                    not located on potential economic resource. The
                                                                     optimisation shells for the combined Indicated and
                                                                     Inferred resources contained about 3 times the volume
                                                                     and mineralisation of those for Indicated alone.


                The infrastructure requirements of the selected      Mining Infrastructure was limited to ROM pad, haul roads,
                mining methods.                                      workshops and other buildings for a contract mining
                                                                     operation.

Metallurgical   The metallurgical process proposed and the           For lithium ore the PFS economics has only considered
factors or      appropriateness of that process to the style of      Phase one processing comprising dense media gravity
assumptions     mineralisation.                                      separation (DMS) of the 1mm to 10mm fraction after
                                                                     P100 crushing to 10mm. This process is considered
                                                                     lowest risk methodology for the ore type comprising
                                                                     zoned, very coarse grained, spodumene-? pegmatite.
                                                                     To further reduce processing risk the DMS circuit will
                                                                     treat 1-5.6mm and 5.6-10mm separately, with partial
                                                                     mica removed from the 1-5.6mm fraction using a reflux
                                                                     classifier (RFC).
                                                                     -1mm material (lithium fines) along with low grade DMS
                                                                     concentrates (middlings) will be treated at a later date
                                                                     through a lithium fines circuit (LFC)
                                                                     For tantalum ore the PFS has only considered tantalum
                                                                     recovery from direct ore feed to the existing tantalum
                                                                     spiral plant and from additional spirals to remove
                                                                     portion of the tantalum from the lithium fines prior to
                                                                     stockpiling for future treatment through the LFC. Test
                                                                     work has shown additional tantalum concentrate
                                                                     recovery can be obtained from treatment of DMS
                                                                     concentrate through jigs however this has not been
                                                                     considered by the PFS.
                Whether the metallurgical process is well-tested     All technologies proposed are proven and well tested with
                technology or novel in nature.                       easily sourced components
Criteria      Explanation                                          Commentary


              The nature, amount and representativeness of         Samples used for metallurgical test work were sourced
              metallurgical test work undertaken, the nature       from existing open pits and 10 diamond core holes
              of the metallurgical domaining applied and the       distributed across the Indicated Resource area.
              corresponding metallurgical recovery factors         Variability test work and mineralogy was undertaken and
              applied.                                             a composite drill core sample was used for design
                                                                   purposes.      A bulk sample collected from open pit
                                                                   material was processed to obtain approximately 1.5
                                                                   tonnes of spodumene concentrates averaging 6.23% Li2O
                                                                   for down-stream test work by lithium convertors.
                                                                   The variability, composite and bulk samples all show the
                                                                   same metallurgical characteristics with no apparent
                                                                   variation or domaining across the deposit.
                                                                   About 99% of Resources are fresh rock and the remaining
                                                                   1% is transitional to fresh rock.
              Any assumptions or allowances made for               For Lithium concentrates potential deleterious elements
              deleterious elements.                                have been observed at low concentrations in
                                                                   concentrates or are non-existent, key deleterious
                                                                   minerals and elements are
                                                                   lepidolite ? not present in test work
                                                                   petalite ? not present in test work
                                                                   Iron ? Concentrates to date contain less than the 0.8%
                                                                   total Fe and 8% moisture content the key contractual
                                                                   requirements.
                                                                   mica ? concentrates to date contain less than 3% mica.
                                                                   The Port of Esperance allows a limit of 5% mica.
                                                                   Detailed mineral product quality and safety chemical
                                                                   and micro mineral analysis undertaken on concentrates
                                                                   for the Port of Esperance returned favourable results.
              The existence of any bulk sample or pilot scale      A bulk sample was processed through a DMS250 at
              test work and the degree to which such samples       Nagrom. A total of 3,887kg of material was treated
              are considered representative of the orebody as      through the DMS after removal of fines and partial mica
              a whole.                                             for recovery of 1,490kg of combined concentrates
                                                                   averaging 6.23% Li2O at a recovery of 95.9% of contained
                                                                   lithium in the DMS feed or net recovery of 84.9% after
                                                                   taking into account lithium contained in fines and RFC
                                                                   rejects. The iron content of the combined concentrate
                                                                   was 0.21%.
                                                                   This is a significantly better result than the Composite
                                                                   test work used for engineering mass balance and PFS
                                                                   recoveries. The exceptionally high recoveries were due
                                                                   in part to the higher than expected head grade of the
                                                                   bulk sample feed resulting in middlings being able to be
                                                                   blended with primary concentrates and grades in excess
                                                                   of 6% being maintained.
              For minerals that are defined by a specification,    The Ore Reserve has been based on being able to produce
              has the ore reserve estimation been based on the     concentrates of at between 5.5% and 7.0% Li2O
              appropriate     mineralogy    to    meet      the
              specifications?

Environmen-   The status of studies of potential environmental     The Site is a ?Brown Fields? site with existing mine
tal           impacts of the mining and processing operation.      workings and infrastructure. The mine has existing
              Details of waste rock characterisation and the       Environmental approvals, conditions and monitoring
              consideration of potential sites, status of design   requirements for pre-existing proposed pits, dumps and
              options considered and, where applicable, the        tails storage which satisfy a limited portion of the
              status of approvals for process residue storage      proposed enlarged Mine site. The project has formal
              and waste dumps should be reported.                  Department of Mines and Petroleum (DMP) approval for
                                                                   the addition of spodumene production and the
                                                                   Department of Environment Regulation (DER) review of
                                                                   the revised construction activities is complete. Additional
                                                                   approvals are still required for larger pits, dumps and the
Criteria         Explanation                                       Commentary
                                                                   long-term tailings facility Studies have shown that there
                                                                   are no significant additional environmental impacts for
                                                                   construction of the lithium circuit or extensions to the
                                                                   existing permitted open pits.

Infrastructure   The existence of appropriate infrastructure:      The Mine is located in the Goldfields region of Western
                 availability of land for plant development,       Australia where good infrastructure is available for
                 power, water, transportation (particularly for    mining projects.
                 bulk commodities), labour, accommodation; or
                 the ease with which the infrastructure can be     A sealed highway and unsealed public road with RAV-7
                                                                   approval provides access from the port of Esperance to
                 provided, or accessed.
                                                                   within 1.8km of the plant site where existing private
                                                                   access road will require minimal upgrading for the
                                                                   increased traffic load.
                                                                   Process water requirements for processing can be
                                                                   serviced from water resources within the mine area, as
                                                                   per the existing water Permits. Potable water will
                                                                   transported to site until the new Mine camp is
                                                                   constructed.
                                                                   Power will be produced on site using diesel generators.
                                                                   Product will be shipped via the port of Esperance located
                                                                   approximately 360km by road to the south.
                                                                   The site will operate on a fly-in fly-out basis to Kalgoorlie
                                                                   or Kambalda with a village constructed to house
                                                                   operations personnel whilst on site. During construction
                                                                   and operations a combination of the existing village and
                                                                   a leased neighbouring village will be used.
Costs            The derivation of, or assumptions made,           Project Capital was derived on the following basis:
                 regarding projected capital costs in the study.
                                                                   The DMS circuit capital estimate was estimated by
                                                                   Primero based on budget pricing and Primero's database
                                                                   of recent project costs. Subsequent to the initial DMS
                                                                   capital estimate a fixed sum EPC price has been agreed
                                                                   based on a detailed scope of works and an early works
                                                                   contract has been signed allowing long lead items to be
                                                                   ordered, detailed design to advanced and mobilization
                                                                   to site. The updated agreed EPC price has been used
                                                                   for the PFS.
                                                                   A number of items outside the Primero scope were
                                                                   costed under by the Company (Owner?s) Costs. These
                                                                   included Road improvements, Additional mining
                                                                   infrastructure, Tailings Storage Facility (TSF) based on
                                                                   initial input from KCB, water reticulation and
                                                                   environmental costs.
                                                                   The Company provided costs for Owner?s team and
                                                                   other related indirect expenses. The Owner?s Costs
                                                                   have been reviewed and compiled by GDC and Mark
                                                                   Gell.
                                                                   Contingency has been applied to account for the
                                                                   accuracy of the estimate.
                                                                   Mining working capital costs include site establishment
                                                                   costs and mobilisation of the contract mining fleet and
                                                                   pre-production costs. The contract mining operation has
                                                                   no mining fleet capital expenditure as these costs are
                                                                   incorporated in the contract mining costs. Pre-
                                                                   production includes clearing and stockpiling of topsoil.
                 The methodology used to estimate operating        DMS reagent consumption was factored from similar
                 costs.                                            operations.
                                                                   Contract crushing unit rates were derived from initial
                                                                   pricing and exclusions received from contractors.
                                                                   Contract mining unit rates were derived from initial
Criteria   Explanation                                        Commentary
                                                              pricing received from contractors.
                                                              The Owner?s team for Mine Management and Technical
                                                              services were based on personnel levels required to
                                                              manage the operation and the Mercer salary Data.


           Allowances made for the content of deleterious     Due to the low concentration of Fe and mica in the
           elements.                                          Concentrates, no allowance was made for deleterious
                                                              elements.


           The source of exchange rates used in the study.    Exchange rates were applied based on external sources
                                                              and at current levels.


           Derivation of transportation charges.              Transport and port charges were derived from
                                                              quotations by reputable contractors and includes
                                                              storage and re-handling costs.


           The basis for forecasting or source of treatment   Based on the off-take agreement concentrates must
           and refining charges, penalties for failure to     contain 5.5% Li2O. positive or negative variations in
           meet specification, etc.                           grade from 6% attract a straight line price adjustment
                                                              increment/decrement of US$/15t based on grade
                                                              variation of 0.1%.


           The allowances made for royalties payable, both    Allowances were made for State Government royalties,
           Government and private.                            no other royalties are payable for production from
                                                              M15/400.
           The derivation of, or assumptions made             Spodumene revenue factors were:
           regarding revenue factors including head grade,
           metal or commodity price(s) exchange rates,        Variable head grade averaging 1.12% Li2O over 3.5 years
           transportation and treatment charges, penalties,   of the mine life after dilution and ore loss
           net smelter returns, etc.                          Processing recoveries applied at 65.8%. Spodumene price
                                                              of US$880/t for 2018, 2019 US$733/t for 2020 and
                                                              US$800/t for 2021 based on 6% Li2O content
                                                              Exchange rate of 0.75 AUD:USD
                                                              Transportation and Port loading charges have been
                                                              allowed for however remain confidential
                                                              Tantalum revenue factors were:
                                                              Direct tantalum feed averaging 342ppm Li2O over 3.5
                                                              years of the mine life with a recovery rate of 65% to
Revenue                                                       saleable concentrates. Secondary production of
factors                                                       191,000kg of tantalum pentoxide from the lithium
                                                              circuit fines.
                                                              Tantalum pentoxide price of US$60/Lb for a 25% Ta2O5
                                                              content
                                                              Exchange rate of 0.75 AUD:USD
                                                              Transportation and Port loading charges have been
                                                              allowed for however remain confidential.
           The derivation of assumptions made of metal or     The commodity pricing for spodumene concentrates is
           commodity price(s), for the principal metals,      based on a price of US$880/t (FOB Esperance) for 6% Li2O.
           minerals and co-products.                          The Company has a binding offtake agreement for the
                                                              supply of lithium concentrate from the Bald Hill Project
                                                              in Western Australia over an approximate initial five-year
                                                              term.
                                                              The key terms of the offtake agreement are as follows:
Criteria     Explanation                                          Commentary

                                                                   ?   A fixed price for all production for 2018 and 2019
                                                                       of US$880/t (FOB Esperance) for 6% Li2O with price
                                                                       adjustment increment/decrement of US$/15t
                                                                       based on grade variation of 0.1%.

                                                                   ?   From 2020 to 2023, the sales price and volumes
                                                                       are to be negotiated and will be by agreed based
                                                                       upon prevailing market conditions at the time.
                                                                  For the purpose of the PFS reference prices of US$733/t
                                                                  for 2020, US$800/t for 2021 and US$753/t for 2022, for
                                                                  6% Li2O concentrates based on Canaccord Genuity
                                                                  forward estimates.
                                                                  The commodity pricing for tantalum is based on a price
                                                                  of US$60/lb (FOB Esperance) for +25% Ta2O5. The
                                                                  assumed spot price is $55/lb and a premium (based on
                                                                  historical sales from Bald Hill) of US$5/lb has been
                                                                  assumed due to the low radiation and past sales history
                                                                  from the Bald Hill Mine. In ?real terms? the current
                                                                  pricing is close to an ?all-time? low however there are
                                                                  no indications a strong correction to pricing.
             The demand, supply and stock situation for the       Medium and long-term supply and demand modeling for
             particular commodity, consumption trends and         spodumene concentrates is difficult to predict due to
             factors likely to affect supply and demand into      the rapid growth in demand and promise of supply.
             the future.

                                                                  The Company has signed a Binding Offtake Agreement
                                                                  (BOA) for 100% of production for the first two years
                                                                  which includes substantial prepayments.
             A customer and competitor analysis along with        Lithium demand growth will likely be driven by demand
             the identification of likely market windows for      for electric cars and energy storage systems. There are
             the product.                                         several large Lithium projects that are expected come
                                                                  into production in late 2018 and 2019 these may result
                                                                  in a period of oversupply from 2020, however based on
                                                                  history supply has significantly lagged analysts?
Market                                                            predictions.
assessment

             Price and volume forecasts and the basis for         The commodity pricing for spodumene concentrates is
             these forecasts.                                     based on a price of US$880/t (FOB Esperance) for 6% Li2O.
                                                                  The Company has a binding offtake agreement for the
                                                                  supply of lithium concentrate from the Bald Hill Project
                                                                  in Western Australia over an approximate initial five-year
                                                                  term.
                                                                  For the purpose of the PFS reference prices of US$733/t
                                                                  for 2020, US$800/t for 2021 and US$753/t for 2022, for
                                                                  6% Li2O concentrates based on Canaccord Genuity
                                                                  forward estimates.
             For industrial minerals the customer                 Concentrates produced during bulk metallurgical test
             specification, testing and acceptance                work are well within contractually acceptable limits of
             requirements prior to a supply contract.             grade and impurities.
             The inputs to the economic analysis to produce       The economic analysis is based on cash flows driven by
             the net present value (NPV) in the study, the        the production schedule. The cash flow projections
             source and confidence of these economic inputs       include:
             including estimated inflation, discount rate, etc.
                                                                  Initial and sustaining capital estimates.
Economic                                                          Mining, processing and concentrate logistics costs to the
                                                                  customer based on FOB pricing.
                                                                  Revenue estimates based on concentrate pricing
                                                                  adjusted for fees, charges and royalties.
                                                                  A 10% discount factor.
Criteria         Explanation                                           Commentary
                 NPV ranges and sensitivity to variations in the       Sensitivity analyses were generated by varying the
                 significant assumptions and inputs.                   salient economic variables. The project is most sensitive
                                                                       to grade, recovery of lithium and AUD/USD. The project
                                                                       is robust against a 20% negative change to recovery,
                                                                       grade, metal pricing, foreign exchange rates, capital or
                                                                       operating costs.
                 The status of agreements with key stakeholders        The site is a Brown Fields operation however over time
                 and matters leading to social licence to operate.     the larger project footprint will have marginal impact
                                                                       on pastoral lease feed and improvements. The Company
Social                                                                 is working with the lessee to mitigate impacts. The
                                                                       License pre-dates Native Title however the Company has
                                                                       been in dialog with the Ngadju Native Title Group on
                                                                       neighboring tenements
                 To the extent relevant, the impact of the following on the project and/or on the estimation and
                 classification of the Ore Reserves:

                 Any identified material naturally occurring risks.    No material naturally occurring risks have been
                                                                       identified.


                 The status of material legal agreements and           The Company has a binding offtake agreement for the
                 marketing arrangements.                               supply of lithium concentrate from the Bald Hill Project
                                                                       over an approximate initial five-year term. Apart from
                                                                       Bald Hill JV agreements that govern the Project there are
                                                                       no other relevant material legal agreements.
Other

                 The status of governmental agreements and             The Company has granted mining lease M15/400 covering
                 approvals critical to the viability of the project,   sufficient area for the open pit, plant and other
                 such as mineral tenement status, and                  infrastructure. Being an operating tantalum mine the site
                 government and statutory approvals. There must        has existing DER operating license and DMP mining
                 be reasonable grounds to expect that all              proposal. An amendment DMP mining proposal has also
                 necessary Government approvals will be received       been approved and a DER license amendment has been
                 within the timeframes anticipated in the Pre-         submitted. There are no apparent impediments to
                 Feasibility or Feasibility study. Highlight and       obtaining all government approvals required for the
                 discuss the materiality of any unresolved matter      project.
                 that is dependent on a third party on which
                 extraction of the reserve is contingent.              The License pre-dates Native Title.


                 The basis for the classification of the Ore           Probable Ore Reserves were determined from Indicated
                 Reserves into varying confidence categories.          resource material as per the guidelines. As there is no
                                                                       Measured resource material, there are no Proven Ore
                                                                       Reserves.

Classification   Whether the result appropriately reflects the         The results reflect the views of the Competent Person.
                 Competent Person?s view of the deposit.

                 The proportion of Probable Ore Reserves that          There are currently no Measured Mineral Resources for
                 have been derived from Measured Mineral               the project
                 Resources (if any).
                 The results of any audits or reviews of Ore           Ore Reserve estimates have been reviewed internally and
                 Reserve estimates.                                    mine design and scheduling has been reviewed. No
                                                                       material flaws have been identified and the Ore reserve
Audits or                                                              is considered appropriate for a PFS level of study.
reviews
                                                                       The Primero capital cost and operating estimate and
                                                                       scope of work was externally reviewed.
                                                                       The financial model was reviewed externally.
                 Where appropriate a statement of the relative         The Ore Reserve is the outcome of the PFS that has taken
Discussion of    accuracy and confidence level in the Ore Reserve      into account geological, metallurgical, geotechnical,
relative         estimate using an approach or procedure deemed        process    engineering      and    mining     engineering
accuracy/        appropriate by the Competent Person. For              considerations. It has a nominal accuracy of + 15% / -10%.
confidence       example, the application of statistical or
                 geostatistical procedures to quantify the relative
Criteria   Explanation                                          Commentary
           accuracy of the reserve within stated confidence     The Project has a IRR and NPV which makes it robust in
           limits, or, if such an approach is not deemed        terms of cost variations. The project is sensitive to price
           appropriate, a qualitative discussion of the         variations for spodumene concentrates and mining costs
           factors which could affect the relative accuracy     and less sensitive to capital costs.
           and confidence of the estimate.


           The statement should specify whether it relates      All estimates are based on local costs in Australian
           to global or local estimates, and, if local, state   dollars.
           the relevant tonnages, which should be relevant
           to technical and economic evaluation.                Standard Industry practices have been used in the
           Documentation should include assumptions made        estimation process.
           and the procedures used.


           Accuracy and confidence discussions should           The degree of accuracy of study knowledge surrounding:
           extend to specific discussions of any applied
           Modifying Factors that may have a material               -    Geology
           impact on Ore Reserve viability, or for which            -    Engineering
           there are remaining areas of uncertainty at the
           current study stage                                      -    Permitting requirements
                                                                    -    Project delivery
                                                                    -    Capital and Operational expenditure estimates,
                                                                         and
                                                                    -    Financial modelling
                                                                are considered to be at a minimum of Class 3 in regard
                                                                to the Association for the Advancement of Cost
                                                                Engineering (AACE). Refer to the AACE International
                                                                Recommended Practice No. 18R-97.
                                                                Importantly:
                                                                    -    Capital expenditure estimates are considered
                                                                         to be within -5%/+10%, and
                                                                    -    Operational expenditure estimates are
                                                                         considered to be within -10%/+15%.
                                                                There are no known undisclosed areas of uncertainty.
           It is recognised that this may not be possible or    There has been no lithium production via DMS to date, so
           appropriate in all circumstances. These              no comparison or reconciliation of data can be made.
           statements of relative accuracy and confidence
           of the estimate should be compared with              There is significant tantalum recovery records and these
                                                                have been used as a basis for estimating future recovery.
           production data, where available.

Date: 11/07/2017 09:39:00 Supplied by www.sharenet.co.za                     
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