LITHIUM SECTOR REVIEW Industry Report

LITHIUM DEVELOPERS LOOK TO CAPITALISE ON GLOBAL OPPORTUNITIES

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Patersons has conducted a review of hard rock lithium (Li) developers General Mining Corporation Limited (GMM), Neometals Limited (NMT) and Pilbara Minerals Limited (PLS) in response to an anticipated increase in future demand for lithium, chiefly for use in Liion batteries within the Electric Vehicle and Energy Storage industries. GMM and NMT are both near-term producers, with GMM set to commence production at its 50% owned Mt Cattlin Project in the first half of CY16. Construction is underway for NMT at its 45% owned Mt Marion Project through its JV with operator Mineral Resources (30%), and offtake partner Gangfeng (25%), while PLS is progressing the DFS for its flagship Pilgangoora Project. Each Company has the potential to enter production at a time when interest in end-user Li applications is at historical highs. GMM has a relatively high Enterprise Value (EV) per spodumene concentrate Measured and Indicated Resource tonne of A$164.72. In our opinion, this is due to its near-term production schedule at Mt Cattlin, 100% offtake agreement with Mitsubishi Corporation and existing processing plant that reduces capex and time to first output. Additionally, due to previous mining conducted by Galaxy Resources (GXY), GMM’s 50/50 JV partner, the main orebody is exposed and ready for excavation, alleviating the need for immediate overburden removal. Although GMM is nearest to production of the three stocks investigated, we believe that there is a risk attached to the processing of ore at the Project, given the 2012 shutdown was stated to be a result of high production costs due to mining and metallurgical recovery problems. NMT is expecting to commence production in mid-2016 following the Company’s Final Investment Decision for its Mt Marion Spodumene Project. The Project is a JV with Mineral Resources (MIN, 30%, operator) and Gangfeng (25%), a Chinese Li Producer, who has agreed to a 100% offtake deal, with NMT and MIN retaining an option to secure 51% of production from Mt Marion after three years. MIN and Gangfeng also have an option to increase their stakes in Reed Industrial Minerals (RIM), the holding subsidiary for the Mt Marion Project, by 18.1% and 13.1% respectively, leaving NMT’s interest at 13.8%, in exchange for a cash consideration of US$46.8m (A$68m). With a diluted Market Capitalisation of cA$85m and Enterprise Value of cA$54m, the market seems essentially to be valuing NMT at close to its potential cash backing, with little credence paid to the Company’s 70% interest in its ELi Downstream Process JV with MIN and its guaranteed minimum 13.8% stake in Mt Marion. We see NMT as potentially undervalued in comparison to its peers with an EV/Resource of A$98.41. PLS is still exploring the extent of its Pilgangoora Lithium deposit and is potentially three years from production. Despite this difference in the Company’s timetable, the scope for addition to the Pilgangoora Mineral Resource is strong, and PLS has the potential to realise some near-term cash flow from its boutique Tantalum play at Tabba Tabba, should recent commissioning problems be resolved efficiently. We estimate a significant cA$100m+ capex cost to reach production of 2Mtpa+ in late CY2018, with the market pricing a high Indicated EV/Resource of A$281.39 as a result. There is upside for PLS through the potential for Pilgangoora to produce low-iron technical spodumene concentrates for sales prices of US$750+ per tonne. PLS is sufficiently funded to complete the DFS for its Pilgangoora Project by July 2016, with the deposit set to rank as the second largest hard rock spodumene Resource in the world.

20 January 2016 Author: Supervising Analyst: Phone: Email:

Damien Gullone Rob Brierley (+618) 9263 1611 [email protected]

General Mining Corporation Limited (GMM) Price A$ 0.30 Shares on Issue m 310.7 Market Cap A$m 100.3 EV/Resource A$/t 165 Cash A$m 10

Price Shares on Issue Market Cap EV/Resource Cash

Neometals Limited (NMT) A$ 0.15 m 559.0 A$m 84.7 A$/t 98 A$m 31

Price Shares on Issue Market Cap EV/Resource Cash

Pilbara Minerals Limited (PLS) A$ 0.275 m 804.5 A$m 246.1 A$/t 281 A$m 12

12 Month Share Price Performance 0.4 0.35 0.3

Share Price (A$)

Investment Highlights

0.25

NMT 0.2

GMM PLS

0.15 0.1 0.05 0

12 Months

All information and advice is confidential and for the private information of the persons to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.

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20 January 2016

We have elected to use Measured + Indicated Resources for the three Companies in our main EV/Resource calculations (see Figure 1), given the lack of reliability in Inferred estimates. The calculations are based upon a 6% Lithium (Li2O) concentrate for battery-grade applications. We note that PLS’ Pilgangoora Project is far less developed than GMM and NMT’s Projects, and we have thus also included calculations for EV/Resource based upon Total Mineral Resource Estimates as further comparison (see Figure 2). GMM has Measured + Indicated Resources of c12Mt @ 1.09% Li2O (50% rights), representing 74% of its total Mineral Resource and an EV/Resource of A$164.72 per spodumene concentrate tonne. This is reflective of the more developed nature of GMM’s resource and the existing infrastructure, including processing plant, at the Project. Both NMT and PLS has less surety attached to potential Resources, with a c10Mt @ 1.45% Li2O Indicated Resource for NMT (45% rights), representing 45% of its total Mineral Resource and an EV/Resource of A$98.41, and a c7.8Mt @ 1.28% Li2O Indicated Resource for PLS (100% rights), a mere 15% of its Total Mineral Resource, with an EV/Resource of A$281.39. Figure 1: Measured + Indicated EV/Resource Comparison Measured + Indicated Resource Estimates Li2O Grade

GMM 1.09%

Concentrate Li2O Grade Tonnage by Rights Tonnage by Rights (m) Recovery Spodumene Concentrate Tonnes

NMT 1.45%

PLS 1.28%

6%

6%

6%

6,036,668 6.04 50% 548,331

4,522,500 4.5 50% 546,469

7,800,000 7.8 50% 832,000

Spodumene Price Assumption (6% Li2O)(CIF, US$t)

450

Spodumene Price Assumption (6% Li2O)(CIF, A$t)

625

Share Price Quoted Market Cap Unlisted Equity Value Diluted Market Cap Estimated Cash Enterprise Value

$ $ $ $ $ $

0.300 93,210,856 7,110,000 100,320,856 10,000,000 90,320,856

$ $ $ $ $ $

0.150 83,855,997 922,417 84,778,414 31,000,000 53,778,414

$ $ $ $ $ $

0.275 221,226,503 24,892,290 246,118,793 12,000,000 234,118,793

EV/Resource (Spodumene Concentrate Tonnes)

$

164.72

$

98.41

$

281.39

Source: General Mining Corporation Limited, Neometals Limited, Pilbara Minerals Limited, Patersons Securities Limited

Our EV calculations using Total Mineral Resource Estimates in Figure 2 demonstrate the differences in confidence behind the Companies’ total Resources. Both NMT and PLS see a significant reduction in EV/Resource, reflective of the greater percentage of Inferred category Resources attributable to the Companies’ Projects. We also note that both GMM and PLS have the potential to produce technical grade spodumene concentrates for application in the ceramic and metallurgical industries; these concentrates are characterised by necessity for low iron (Fe) presence and command prices of US$750+ per tonne. This option presents upside for GMM and PLS that has not been included in the Companies’ EV/Resource. Figure 2: Mineral Resource Estimate EV/Resource Comparison Mineral Resource Estimates Li2O Grade

GMM 1.08%

Concentrate Li2O Grade Tonnage by Rights Tonnage by Rights (m) Recovery Spodumene Concentrate Tonnes

NMT 1.39%

PLS 1.28%

6%

6%

6%

8,200,000 8.2 50% 738,000

10,458,000 10.5 50% 1,211,385

52,200,000 52.2 50% 5,568,000

Spodumene (6% Li2O)(CIF, US$t)

450

Spodumene (6% Li2O)(CIF, A$t)

625

Share Price Quoted Market Cap Unlisted Equity Value Diluted Market Cap Estimated Cash Enterprise Value

$ $ $ $ $ $

0.300 93,210,856 7,110,000 100,320,856 10,000,000 90,320,856

$ $ $ $ $ $

0.150 83,855,997 922,417 84,778,414 31,000,000 53,778,414

$ $ $ $ $ $

0.275 221,226,503 24,892,290 246,118,793 12,000,000 234,118,793

EV/Resource (Spodumene Concentrate Tonnes)

$

122.39

$

44.39

$

42.05

Source: General Mining Corporation Limited, Neometals Limited, Pilbara Minerals Limited, Patersons Securities Limited

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All information and advice is confidential and for the private information of the persons to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.

20 January 2016

Figure 3 presents an overall comparison of each of the covered stocks based upon the progression of the Companies’ major Projects; both GMM and NMT expect to transition into production in the next three to six months, while PLS is still developing Feasibility studies for its Pilgangoora Project. Figure 3: Company Development Comparison GMM Mineral Resource

16.4Mt @ 1.08% Li2O (50% rights)

Due Diligence Processing Facility in Place Anticipated Production Date Estimated CAPEX Expenditure for Production (A$) Anticipated LOM

DFS (GXY) Yes Mid CY2016 $8m 17 years @ 800Ktpa Li2O

Offtake Agreement Other Projects Major Risk Cash (A$) Diluted Market Cap (A$) Measured +Indicated EV/Spodumene Concentrate Tonne (A$) NMT Mineral Resource

100% James Bay Lithium Project (50%, subject to US$5m expenditure over 3 years) Optimisation of Spodumene, Tantalum and Mica Recoveries $10m $100m $165

Due Diligence Processing Facility in Place Anticipated Production Date Estimated CAPEX Expenditure for Production (A$) Anticipated LOM

Final Investment Decision for Mt Marion, DFS Underway for ELi Downstream Process Under Construction Mid CY2016 c$2m (MIN bears cost) 13 years @ 1.8Mtpa Li2O

Offtake Agreement Other Projects Major Risk Cash (A$) Diluted Market Cap (A$) Measured +Indicated EV/Spodumene Concentrate Tonne (A$) PLS Mineral Resource

100% Barrambie Titanium Project (100%) Potential for ELi Downstream Process to Prove Unviable $31m $85m $98

Due Diligence Processing Facility in Place Anticipated Production Date Estimated CAPEX Expenditure for Production (A$) Anticipated LOM Offtake Agreement Other Projects Major Risk Cash (A$) Diluted Market Cap (A$) Measured +Indicated EV/Spodumene Concentrate Tonne (A$)

PFS Underway and DFS to Follow No Potential for Late 2018 c$100m plus additional OPEX for Throughput Increases Subject to DFS, expected to be 2Mtpa with potential for up to 3Mtpa, 35+ years 100% (MOUs) Tabba Tabba Tantalum Project (100%, Potential Near-Term Production) c$100m Financing Costs to get to Production Stage $12m $246m $281

23.2Mt @ 1.39% Li2O (45% rights)

52.2Mt @ 1.28% Li2O and 32.9Mt @ 0.022% Ta2O5 (100% rights)

Source: General Mining Corporation Limited, Neometals Limited, Pilbara Minerals Limited, Patersons Securities Limited

Figure 4 presents a global comparison of major lithium deposits, depicting both producing and in-development projects. Figure 4: Global Lithium Deposits

Source: Pilbara Minerals Limited

All information and advice is confidential and for the private information of the persons to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.

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20 January 2016

Figure 5: Measured and Indicated Resource Comparison

Figure 6: Mineral Resource Estimate Comparison

Measured + Indicated Resources 1.28% 1.09%

7.8mt

Li2 O %

Tonnes (m)

0.80% 4.0

0.60%

6.04mt

1.40% 1.20%

40.0

1.00%

30.0

0.80% 52.2mt

0.60%

20.0

0.40%

0.40%

4.5mt

2.0

1.28%

1.08%

1.00%

5.0

1.60%

1.39%

50.0

1.20%

6.0

3.0

60.0

1.40%

10.0 0.20%

1.0

0.0 NMT Tonnes

8.2mt

10.46mt

GMM

NMT

PLS

0.00% Tonnes

Lithium Grade

Source: General Mining Corporation Limited, Neometals Limited, Pilbara Minerals Limited

0.20%

0.0

0.00% GMM

Li2 O%

1.45%

8.0 7.0

Mineral Resource Estimates (MRE) 1.60%

Tonnes (m)

9.0

PLS Lithium Grade

Source: General Mining Corporation Limited, Neometals Limited, Pilbara Minerals Limited

Figures 5 and 6 serve to compare each Company’s share of Measured + Indicated Resources versus Total Mineral Resource Estimates. PLS’ 100% entitlement to its flagship Pilgangoora Project sees it holding greater tonnage than GMM and NMT in both measures. While NMT claims significantly lower Measured + Indicated tonnage, the Mt Marion deposits’ high 1.45% Li2O content sees estimated spodumene concentrate tonnes of c546Kt, comparable to that of GMM at c548Kt. Figures 7 and 8 illustrate the EV/Resource disparity between the three stocks using Measured + Indicated Resources versus Total Mineral Resource values. The greater confidence attached to GMM’s Resource is evident through the two comparisons, with NMT maintaining the lowest Measured + Indicated EV/Resource at A$98.41, despite only 45% of its Total Mineral Resources falling into these categories. Again, the market is valuing PLS at a high Measured + Indicated EV/Resource as per Figure 7, given the comparatively lessdeveloped stage of the Project. NMT and PLS, in particular, have reasonable scope to improve their Mineral Resources through continued extensional drilling campaigns during 2016. Figure 7: Measured + Indicated Enterprise Values

Figure 8: Mineral Resource Enterprise Values

M+Ind Enterprise Value per Spodumene Concentrate Tonne

MRE Enterprise Value per Spodumene Concentrate Tonne

$300

$140

$250

$120 $100

$200

$80

$150 $60

$100

$40

$50

$20

$164.72

$98.41

$280.48

$0 GMM

NMT

PLS

Source: General Mining Corporation Limited, Neometals Limited, Pilbara Minerals Limited, Patersons Securities Limited

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$122.39

$44.39

$41.91

GMM

NMT

PLS

$0

Source: General Mining Corporation Limited, Neometals Limited, Pilbara Minerals Limited, Patersons Securities Limited

All information and advice is confidential and for the private information of the persons to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.

20 January 2016

LITHIUM MARKET & APPLICATIONS Figure 9: Lithium Consumption by Application

Figure 10: Lithium Battery Demand Forecast

Source: Lithium Australia NL

Source: Roskill Information (2013)

Lithium-ion batteries are the major growth segment of the lithium market, with applications in portable electronic devices, and increasingly, energy storage and electric vehicles. Currently, Panasonic is the largest Li-ion battery producer in the world with around 20% market share. Figure 9 depicts the major lithium applications, while Figure 10 illustrates the lithium battery market’s continued expansion potential as US and Chinese entities work to establish market share in the growing Energy Storage (ES) and Electric Vehicle industries. Comprised of Hybrid Electric Vehicle, Plug-in Hybrid Electric Vehicle and Electric Vehicle sectors, the Electric Vehicle industry is seeing a push towards the latter ‘pure’ sector, with China targeting affordable sub US$20k prices, while in the US the new Tesla 3 Series will be released in 2017 for a price of US$36k. In Europe, Volkswagon and Audi has indicated intentions to enter the market in 2018 and BMW has already entered the market through its i3 and i8 models. Governing bodies in key Asian markets including China are supporting the development of the EV industry, with large sales rebates and reduced or non-existent sales taxes and licensing costs. Lithium batteries for use within the EV market require a chemical-grade product, with all three stocks investigated capable of producing the required material. While GMM and PLS has indicated potential to supply the technical-grade concentrate necessary for many glass and ceramic applications, we note that NMT has not commented on whether its material will meet specifications. NMT’s current Mineral Resource estimate is 23.42Mt @ 1.39% Li2O and 1.43% Fe; should the Company be unable to reduce the iron content through processing, we believe it is unlikely its product will meet technical-grade requirements.

All information and advice is confidential and for the private information of the persons to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.

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20 January 2016

GENERAL MINING CORPORATION LIMITED (GMM) Summary GMM has secured the right to earn 50% of the Mt Cattlin Spodumene Project through a Joint Venture with Galaxy Resources (GXY). In return, the Company must pay a total of A$25m comprising A$7m+ in capex to fund the re-start of production at the mine, and the remaining A$18m to GXY in a succession of payments of no less than A$6m per year for the three years following commencement of production. GMM has also secured an agreement with Mitsubishi Corporation, one of the world’s leading resources trading houses, for the sale of up to 100% of spodumene concentrate for supply to a number of growing Asian economies. While GMM has thus far been successful in developing the Mt Cattlin Project towards first half CY16 production, the real test will be whether the Company is successful in its bid to re-optimise the underperforming mining and processing strategies that saw the Project shutdown in mid-2012. To date, the Company has released limited information on how this will be achieved, though we note the addition of metallurgists Michael Kitney and Alan Still to the Company’s board. Figure 11: GMM Production Timetable

Source: General Mining Corporation Limited

Projects Mt Cattlin Lithium Project GMM’s primary asset is the right to earn 50% of the Mt Cattlin hard rock spodumene project in Ravensthorpe, Western Australia with Galaxy Resources (GXY) in exchange for the sole funding of A$25m for the re-start of production in April 2016, as well as additional cash payments to GXY. Cost estimates from GMM are a conservative $7m for capex plus a minimum of $18m over 3 years to GXY. We anticipate actual capex expenditure to be A$8m+, with additional costs expected as GMM works to optimise recovery rates at the Project’s 1Mtpa processing plant. Mount Cattlin has an estimated Mineral Resource of 16.4Mt @ 1.08% Li 2O, 157ppm Ta2O5 and 87ppm Nb2O5 and a Reserve of 10.7Mt @ 1.04% Li2O, 146ppm Ta2O5. The Company estimates the Project has a 17 year LOM (Life of Mine) at a potentially conservative 800ktpa Li2O. Previously, the Project was shut down due to mining and processing inefficiencies in which spodumene recoveries averaged a reported 53% versus projected recoveries of 70%. GMM and GXY believe the Project can be reinvigorated through an extensive review of financial, mining, and processing strategy. Figure 12 presents Patersons’ Quarterly calculations of recoveries at Mt Cattlin during the previous mining period between 2010 and 2012. We calculate overall recovery of spodumene to be 51.98% and note GMM will be likely again be targeting a 70%+ recovery rate when production is restarted. As part of the review commissioned to achieve this, the Company’s financial model for Mt Cattlin was independently quantified by Entech Mining Consultants, while the addition of metallurgists Michael Kitney and Alan Still to the Company as Non-Executive Directors is anticipated to aid in the technical optimisation of spodumene and tantalum 6

All information and advice is confidential and for the private information of the persons to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.

20 January 2016

recovery. We note that up to 30% of the ore produced at Mt Cattlin was estimated as technical grade by GXY and is fit for glass and ceramic applications that can command prices of US$750+ per tonne. Figure 12: Quarterly Recoveries for GXY at Mt Cattlin, 2010 to 2012

GXY Mt Cattlin Spodumene Recoveries 2010 - 2012 80% 70% 60%

50% Quarterly Recovery

40%

Target Recovery

30%

Weighted Average Recovery

20% 10% 0% Dec-10

Mar-11

Jun-11

Sep-11

Dec-11

Mar-12

Jun-12

Sep 2012 (July Only)

Source: Galaxy Resources Limited, Patersons Securities Limited

James Bay Lithium Project GMM will also acquire a 50% equity interest in the James Bay Project in Quebec, Canada if it chooses to spend US$5m over a three year period. James Bay has an estimated hard rock Total Mineral Resource of 22.2Mt @ 1.28% Li2O.

Processing GMM has plans to utilise a Mica Scavenging Circuit as part of the Mt Cattlin processing optimisation strategy. The prior processing flowsheet failed to effectively recover mica and negatively impacted operational efficiency and water requirements. Tantalum and spodumene recovery via flotation methods is also being optimised, with GMM targeting an increase in Tantalum recovery from 10-15% to 65%+. An increase in spodumene and tantalum recoveries above those achieved during the initial mining efforts by GXY is integral to the ongoing viability of the Project.

Offtake Agreement GMM signed a Sales & Distribution Agreement with Mitsubishi Corporation (“Mitsubishi”) for up to 100% of lithium bearing spodumene concentrate produced at the Mt Cattlin Project. Mistubishi has exclusive rights to sell up to 100% of the supplied spodumene concentrate into four countries: China, South Korea, Taiwan, and Vietnam. As part of the deal, GMM will be paid directly by the A1 rated Mitsubishi for all sales. Mitsubishi will have priority over spot buyers, provided the price paid is at least equivalent to market rates. Additionally, Mistubishi cannot distribute spodumene concentrate from any other source to the four countries; providing exclusivity for both parties.

Corporate Figure 13: GMM Corporate Structure Price 0.3

Shares 310,702,853

Unlisted Securities 23,700,000

Market Capitilisation $93,210,855.90

Diluted Market Capitilisation $100,320,855.90

Cash $10m

Enterprise Value $90,320,855.90

Source: General Mining Corporation Limited, Patersons Securities Limited

GMM has seen two successful cap raisings in the second half of CY2015, the first being a Rights Issue in September for A$5m, the second an A$7.2m placement at A$.18/sh. We estimate GMM’s cash position as at 31 December 2015 to be A$10m and believe the Company is sufficiently funded to see through the CAPEX

All information and advice is confidential and for the private information of the persons to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.

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20 January 2016

agreement with GXY to re-start production at Mt Cattlin. The agreed-upon cash payments for the three years post production restart will need to be funded by GMM’s 50% entitlement to the Mt Cattlin lithium sales.

Risks Project Risk We believe the foremost risk for GMM is the issue of spodumene and mica recovery, given the problems that arose during GXY’s previous production phase at Mt Cattlin. The addition of technical personnel and a review of the processing flow sheet aim to alleviate potential problems heading into 2016 production. Financing Risk GMM should have sufficient current cash reserves to see the Mt Cattlin project back into production, given our capex estimation of A$8m. However, the cash payments that need to be made to GXY will need to come from GMM’s share of spodumene and potential mica sales and it is therefore important that the Company’s timeline to production is met. Commodity Price Risk As with all natural resources Companies, including GMM, NMT and PLS, the price of relevant commodities plays a large part in the economic viability of projects. We note that the demand outlook for future lithium raw materials is bullish.

Board of Directors Mr Michael Fotios – Executive Chairman Mr Fotios is a geologist with more than 25 years’ experience, chiefly in exploration for gold, base metals, tin and tantalum. Mr Fotios was a Director of Galaxy Resources (GXY) from 2006 to 2008. He is currently a Director of Northern Star Resources, Horseshore Metals, and Pegasus Metals. Mr Alan Still – Non-Executive Director Mr Still is a metallurgist with 40 years’ experience in a range of commodities. He is also a Director of Horseshoe Metals, Swan Gold Mining, and Pegasus Metals. Mr Michael Kitney – Non-Executive Director Mr Kitney is a metallurgist with 40 years of experience, with exposure to lithium projects and processing. He is currently the COO of Kasbah Resources.

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All information and advice is confidential and for the private information of the persons to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.

20 January 2016

NEOMETALS LIMITED (NMT) Summary Neometals owns a 45% stake in the Mt Marion hard rock Lithium Project with JV partners Gangfeng (25%) and Mineral Resources (30%). The Project is underwritten by a 100% LOM offtake to Gangfeng after the Chinese Company purchased its 25% stake for US$19.75m. Production of in-excess of 200,000tpa of spodumene concentrate is expected to commence in mid-CY2016, coinciding with results from NMT’s DFS for its proprietary ELi Downstream Processing technology. As part of a JV with Mineral Resources (30%), in which NMT owns a 70% share, the ELi process aims to produce 20,000tpa of Lithium Hydroxide (LiOH) from spodumene concentrate, with an option in place for NMT and MIN to purchase up to 51% of Mt Marion’s lithium production from Gangfeng after the first three years of mine operations. At present, the market appears to be valuing only NMT’s stake in Mt Marion plus its cash reserves, with no credence paid to the ELi process potential or the Company’s 100% stake in the high grade Barrambie Titanium and Vanadium Project.

Projects Mt Marion Lithium Project NMT’s major asset is the Mt Marion Lithium Project near Kalgoorlie, Western Australia, owned as part of a JV with 45% rights to Neometals, 25% to Ganfeng Lithium (China), and 30% to Mineral Resources (MIN, Project operator). The Project comprises six hard rock deposits running an estimated Mineral Resource of 23.24MT @ 1.39% Li2O all within a few km of the Processing facility. This estimate is likely to be increased in the June Q 2016, following an update to the Resource after current in-fill drilling finishes in March 2016. Construction at the Project commenced in September 2015 and first production is anticipated to commence mid-CY2016 at a rate of 200,000tpa+ of spodumene concentrate, with a LOM of 13.2yrs. We estimate minimal CAPEX expenditure of cA$2m for NMT before production as MIN is responsible for the costs of construction as part of its 30% earn-in rights, holding a comprehensive mining services agreement with NMT. Figure 9 depicts the mine layout and processing facilities currently under construction. Figure 14: Mt Marion Mine Map

Source: Neometals Limited

We note Ganfeng and Mineral Resources have the option to increase their interests in the Mt Marion Project by 18.1% and 13.1% respectively, through additional purchases in the holding entity Reed Industrial Minerals (RIM). This will leave NMT’s interest at 13.8%, in exchange for a cash consideration of US$46.8m (A$68m). The deal values the Mt Marion Project at US$150m, with an EV/Resource per spodumene concentrate tonne of $123.52, more than A$25 above current market valuation. Barrambie Titanium/Vanadium Project NMT owns a full 100% stake in the 47Mt @ 22% TiO2 and 0.63% V2O5 (Mineral Resource Estimate) Barrambie Project near Mt Magnet in Western Australia, and completed a Pre-Feasibility Study (PFS) in August 2015 (see Figure 15), confirming the first-pass viability of the project. All information and advice is confidential and for the private information of the persons to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.

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20 January 2016

Figure 15: Barrambie Pre-Feasibility Study

Source: Neometals Limited, 1Estimated to accuracy of ±25%

Downstream Processing (ELi) NMT’s patented ELi process aims to produce 20,000tpa of battery-grade Lithium Hydroxide (LiOH) directly from spodumene (lithium oxide) concentrates. The downstream technology and related patents are owned by Reed Advanced Materials Pty Ltd (RAM), which is beneficially owned 70:30 by NMT and MIN. Feedstock for the process will be derived from NMT and MIN’s entitlement to purchase up to 51% of lithium concentrates produced from Mt Marion after the third year of production. The Downstream Process is planned to be based in Malaysia. A Pre-Feasibility Study (PFS) for the technology was conducted in 2012 and demonstrated the potential for the ELi Process to deliver industry leading operating costs of cUS$3,877/t lithium hydroxide (LiOH). To put this into perspective, prices for LiOH recently rose above US$14,000 per tonne. A Definitive Feasibility Study was commenced in November 2015 to confirm the technology’s viability; this will incorporate a semi-pilot scale test work program that is expected to exceed expectations for purification of lithium chloride solutions and improve process efficiency above and beyond levels met in the PFS.

Offtake Agreement nd

Gangfeng, China’s 2 largest lithium producer, has agreed to purchase 100% of spodumene production from the Mt Marion Project for the full Life of Mine (LOM) at market prices on a Cost, Insurance and Freight (CIF) basis, subject to an agreed price floor. Following the first three years of production, MIN and NMT can exercise options to collectively purchase up to 51% of spodumene production, reducing Gangfeng’s entitlement to 49%.

Corporate Figure 16: NMT Corporate Structure Price 0.15

Shares 559,039,983

Unlisted Securities 6,149,446

Market Capitilisation $83,855,997.45

Diluted Market Capitilisation $84,778,414.35

Cash $31m

Enterprise Value $53,778,414.35

Source: Neometals Limited, Patersons Securities Limited

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All information and advice is confidential and for the private information of the persons to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.

20 January 2016

Figure 17: NMT Group Structure

Source: Neometals Limited

Figure 17 details the Group Structure of NMT, with the Company owning 45% in its RIM JV and 70% of the RAMJV with MIN. Ganfeng and Mineral Resources have the option to increase their interests in RIM by 18.1% and 13.1% respectively, leaving NMT’s interest at 13.8%, in exchange for a cash consideration of US$46.8m (A$68m). We estimate NMT’s current cash levels at cA$31m with a cash burn of A$3m for the December 2015 Quarter and thus the Company is well-funded to progress the ELi DFS through to completion in midCY2016.

Risks Project Risk Much of the Mt Marion Project Mineral Resource is still in the Inferred Category, and NMT should be looking to convert a greater proportion to Measured and Indicated stage as development towards production continues. Should NMT be unable to do so, the Project value could be adversely affected. Processing Technology Risk We believe there is potential future value for NMT attached to the ELi process JV, and the arrival of the DFS for this Project in mid CY2016 presents as a possible future upside for the Company. Should the Project prove technically unviable, the majority of the Company’s value may be derived solely from production entitlements at Mt Marion.

Board of Directors Mr Steven Cole – Chairman Mr Cole has more than 40 years corporate and business experience across a broad range of industries including the resources, industrial, financial, agribusiness and health sectors. Mr Christopher Reed – Managing Director Mr Christopher Reed is an accountant with more than 20 years’ exposure to the resource industry and a decade of exposure to corporate administration and management. Mr Reed served as Managing Director of Reed Resources Limited for more than four years between 2007 and 2012 and has been Managing Director of Neometals Limited since October 2013. Mr David Reed OAM – Non-Executive Director Mr David Reed is an accountant with more than 40 years’ experience in corporate management and financial markets. Mr Reed has served as chairman of several ASX listed mineral exploration companies and received an Order of Australia medal in 2002.

All information and advice is confidential and for the private information of the persons to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.

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20 January 2016

PILBARA MINERALS LIMITED (PLS) Summary Pilbara Minerals’ Pilgangoora deposit ranks as the world’s second largest hard rock Li spodumene resource and the Company is in the process of completing a Definitive Feasibility Study that should confirm the viability of the Project in mid CY16. The deposit appears to possess the metallurgical characteristics necessary to supply spodumene product for use across lithium’s varied applications in glass, ceramic and battery markets. PLS also enjoys the potential to realise some near-term cash flow through its boutique Tabba Tabba mine near Port Hedland; provided the Project’s commissioning issues are resolved efficiently, the funds can be put towards developing Pilgangoora through to production. While we acknowledge the significant costs involved in Pilgangoora’s development, PLS has already secured six MOU offtake agreements for 100% of spodumene production, confirming the global interest in the Project and the encouraging potential for financing as the Project matures.

Projects Figure 18: PLS Projects and Resource Estimates

Source: Pilbara Minerals Limited

Pilgangoora Lithium Project PLS is looking to transition from explorer to producer at its Pilgangoora Lithium Project, located south-east of Port Hedland, with a current Indicated and Inferred hard rock Resource of 52.2Mt @ 1.28% Li2O containing 668,000 tonnes of lithium oxide and 32.9Mt @ 0.022% tantalite containing 15.7 million pounds Ta 2O5. A Definitive Feasibility Study (DFS) for Pilgangoora is underway with release expected in the first half of CY16. The DFS is being conducted in tandem with a Pre-Feasibility Study, the latter of which is due in the March Q 2016, followed by the completed DFS in the July Q 2016. The Study is currently at the financial modelling stage, with specialist consultants coming on-board for technical mine assessment. Comprehensive environmental permitting is also underway, along with first phase metallurgical testwork. Pilgangoora has an Exploration Target of 80 – 90 Mt @ 200-300ppm Ta2O5 and 1.3-1.5% Li2O with a Resource update to include the recently concluded drilling program due late January 2016. The production timetable for Pilgangoora has been expedited due to strong project economics, ‘off the shelf’ processing and the potential for growth in raw lithium demand. 12

All information and advice is confidential and for the private information of the persons to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.

20 January 2016

Tabba Tabba Tantalum Project Tabba Tabba is PLS’ 100% owned high grade tantalum project, east of Port Hedland, where initial commissioning commenced in November 2015, following completion of the 120,000tpa processing plant. First shipment of ore at Tabba Tabba has recently been delayed due to issues in the ball mill and coarse recovery section of the plant, with PLS working to re-establish processing as soon as practicable. The 2014 Project DFS stated total combined Proven and Probable Reserves of 133,000 tonnes of ore at 1,290ppm Ta2O5 for 378,000 pounds of contained Ta2O5, and presents as a near-term cash flow opportunity with the potential to assist in funding the Pilgangoora Project through to operation. The LOM for Tabba Tabba will be c1.5 years at a production rate of 250,000 pounds of tantalum per annum, but may be extended via additions to the Resource from the nearby Strelley Prospect, depicted in Figure 18, with PLS projecting a total Mineral Resource of 666,200lb Ta2O5.

Offtake Agreements Tabba Tabba PLS has secured a maximum five year exclusive mining and off-take agreement with Global Advanced Metals Pty Ltd (GAM) for 100% of tanatalum production for market prices at Tabba Tabba. Pilgangoora At Pilgangoora, PLS has signed Memorandum’s of Understanding (MOU) for spodumene concentrate off-take with six international materials houses spanning Asia, North America and Europe for 100% of spodumene production. Recently, the mineralisation at Pilgangoora has demonstrated the potential to house commercial levels of mica, and PLS has entered into an MOU with Lithium Australia (LIT) to generate prospective targets. LIT is developing a disruptive Li recovery technology, and will likely look to secure a mica offtake agreement with PLS should economics levels of mica mineralisation be realised.

Corporate Figure 19: PLS Corporate Structure Price 0.275

Shares 804,460,010

Unlisted Securities 95,667,419

Market Capitlisation $221,226,502.75

Diluted Market Capitlisation $246,118,792.98

Cash $12m

Enterprise Value $234,118,792.98

Source: Pilbara Minerals Limited, Patersons Securities Limited

PLS has c804m shares on issue with an in-the-money unlisted security value of A$24.8m if converted at current price levels. The Company conducted a major cap raising in November 2015 that raised A$12m before costs at an issue price of A$0.23c per share. The funds will be used primarily to continue the DFS at Pilgangoora and address any issues encountered as Tabba Tabba looks to enter a self-sustaining cash-flow positive phase.

Risks Financing Risk It is our opinion that the key risk for PLS lies in the potential A$100m+ CAPEX required to see the Pilgangoora Project into production. Should funding be unavailable, the Project may never reach a cash flow positive stage. Project Risk Much of the Pilgangoora Project’s Mineral Resource is still in the Inferred Category, with PLS working to further define the Resource throughout 2016. It is important that the Company continues to convert its Mineral Resource into Measured and Indicated Categories as it conducts the Project’s DFS in 2016.

All information and advice is confidential and for the private information of the persons to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.

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20 January 2016

Board of Directors Mr Tony Leibowitz - Non- Executive Chairman Mr Leibowitz has more than 30 years of broad corporate and commercial experience. He has a record of capital raisings, mergers and acquisitions, and corporate governance and was previously a global partner at PriceWaterhouseCoopers in Perth and Sydney for more than a decade. Neil Biddle - Executive Director, Consultant Geologist Mr Biddle is a geologist with over 30 years professional experience in the exploration and mining industry and has served on the Board of several ASX listed companies. Mr Biddle was a director of Arunta Resources Limited from April 2013 to April 2015. John Young - Executive Director Mr Young is an experienced geologist in gold, uranium and specialty metals and was Exploration Manager for for Haddington Resources Limited from 2002 to 2006. Mr Young’s corporate experience has included appointments as CEO of Marenica Energy Limited and CEO and Director of Thor Mining PLC. Mr Young is a Director of Mosman Oil and Gas. Robert Adamson - Non-Executive Director Mr Adamson’s has nearly 50 years’ experience in management, Board duties and mineral exploration for gold, base metals, and diamonds principally in Australia, southern Africa, New Zealand, South Korea, Canada, and the Philippines. He has participated in the discovery and resource definition of several operating mines.

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All information and advice is confidential and for the private information of the persons to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.

20 January 2016

All information and advice is confidential and for the private information of the persons to whom it is provided and is provided without any responsibility or liability on any account whatsoever on the part of this firm or any member or employee thereof.

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