Mithril Resources : December 2018 Quarterly Activities and Cash Flow Report 24 January 2019

Quarterly Report

For the Period Ending 31 December 2018

Key Points

Billy Hills (Zinc)

• • Targeting large scale zinc + lead + silver deposits within soil-covered portions of fault zones immediately along strike from existing surface and bedrock mineralisation

• • Multiple targets characterised by elevated rock chip results up to 14.24% zinc + lead, an untested IP geophysical anomaly and / or broad zones of bedrock drill hole anomalism

• • Historic data review and drill hole planning underway

• • Heritage Protection and Exploration Agreement executed with Traditional Owners to enable commencement of exploration activities following conclusion of current Wet Season

Duffy Well (Gold)

• • Project covers the southern extension of the Gnaweeda Greenstone Belt which hosts the Turnberry Gold Deposit (Indicated and Inferred Resources of 5.5Mt @ 1.8g/t for 322,000 contained ounces)

• • Multiple targets identified that are characterised by zones of structural complexity with coincident bedrock gold and arsenic anomalism within wide-spaced historic aircore drill holes

• • Field inspection of targets to be undertaken during the March 2019 Quarter

Bangemall (Copper, Lead, Zinc)

• • Multiple targets identified along strike from the Abra Deposit

• • Target generation continuing ahead of anticipated tenement grant in June 2019 Quarter

Limestone Well (Vanadium)

• • Auteco Minerals (earning up to 80% of the project) to drill test a new vanadium target during the 1st Half of 2019

• • Limestone Well lies directly north along strike from the Barrambie Titanium Vanadium Deposit (2012

  JORC Inferred + Indicated Resource of 280.1Mt @ 9.18%TiO₂ and 0.44%V₂O₅)

Cash

• • Cash reserves of $1.25M at 31 December 2018.

22B Beulah Road	T:	(61 8) 8132 8800	ASX Code:	MTH
Norwood, South Australia, 5067	F:	(61 8) 8132 8899	Issued Shares:	422,389,211
www.mithrilresources.com.au	E:	[e-mail]

Exploration Overview

Mithril Resources (ASX: MTH - "Mithril") and its exploration partners are exploring for a range of high-value commodities throughout the Meekatharra, West Kimberley and Kalgoorlie Districts of Western Australia (Figure 1).

Mithril's primary focus is the Billy Hills Zinc Project where multiple targets have been identified for follow-up.

During the December 2018 Quarter (the "Quarter")

Mithril executed a Heritage Protection and Mineral Exploration Agreement for the Billy Hills Zinc Project, and continued with target generation activities at the Bangemall Base Metal Project.

Mithril's exploration partners defined a new vanadium drill target at Limestone Well and completed a Positive Scoping Study at the Spargos Reward Gold Deposit.

Planned activities for the March 2019 Quarter comprise: the design of a drill program to test a high-priority zinc target at Billy Hills, field inspection of gold targets at Duffy Well, and target generation activities at Bangemall.

Corporate

During the Quarter, Mithril spent $0.13M on exploration activities outlined in this report and at 31 December 2018 had cash reserves of $1.25M.

Mithril raised $1.11M (before costs) through a Placement and a subsequent fully underwritten non-renounceable pro-rata rights issue at an issue price of $0.005 (0.5 cents), following which, the Company had 422,389,211 Ordinary Shares on issue.

Patersons Securities Ltd ("Patersons") acted as Lead Manager to the Placement and Rights Issue and fully underwrote the Rights Issue.

The Company expresses their appreciation to participating shareholders for their ongoing support and welcomes new shareholders to the register.

22B Beulah Road	T:	(61 8) 8132 8800	ASX Code:	MTH
Norwood, South Australia, 5067	F:	(61 8) 8132 8899	Issued Shares:	422,389,211
www.mithrilresources.com.au	E:	[e-mail]

Billy Hills (Zinc)

(Mithril 100%)

During the Quarter, Mithril executed a Heritage Protection and Mineral Exploration Agreement with the Gooniyandi Aboriginal Corporation (GAC) for the Project (located 25kms southeast of Fitzroy Crossing in the West Kimberley region of Western Australia - Figures 1 and 2).

The agreement is a significant development for the project as it allows Mithril to commence on-ground exploration activities at Billy Hills under a series of heritage protection protocols that have been developed in consultation with the GAC. The GAC are the Native Title Prescribed Body Corporate for the Gooniyandi Traditional Owners who are the Registered Native Title Claimants for the project area.

At Billy Hills, Mithril is targeting large scale zinc + lead + silver deposits within soil-covered portions of fault zones immediately along strike from existing surface and bedrock mineralisation.

Billy Hills is relatively under-explored with the bulk of historic drilling and geophysical testing carried out on the adjacent Pillara Mine Lease (ML04/118) which hosts the Pillara Zinc Deposit. Pillara had a pre-mine resource of 18.05 million tonnes at 7.7% Zn and 2.4% Pb and produced 10.3 Mt @ 6.9% Zn, 2.3% Pb from June 1997 to October 2003 (See Mithril's ASX Announcement dated 21 August 2017).

Mithril's work to date has identified multiple targets (including the high-priority Target A - see Figure 3) which will be tested with a combination of geophysics (Induced Polarisation) and diamond drilling once the current Wet Season has concluded late next Quarter (See Mithril's ASX Announcement dated 12 September 2018).

Target A (1.8 km² area) covers the northern end of a soil - covered NNW trending fault zone along strike from surface mineralisation (elevated rock chip samples up to 14.24% zinc + lead) and drill hole bedrock anomalism to the south, i.e.;

• • 3.0m @ 4.41% zinc + lead from 77 metres in PD508, 5.0m @ 1.4% zinc + lead from 274 metres in PLR0510 including 3m @ 1.88% zinc + lead from 277 metres,

• • 14.90m @ 1.0% zinc + lead from 179.10 metres and 5.80m @ 1.04% zinc + lead from 225.20 metres in PLR0509, and

• • 1.7m @ 1.39% zinc + lead from 215 metres, 6.0m @ 0.68% zinc + lead from 249 metres, and 9.0m @ 0.57% zinc + lead from 268 metres in PD646.

The prospectivity of Target A is supported by the presence of a strong Induced Polarisation ("IP") geophysical anomaly identified by previous explorers but never drill tested.

The IP anomaly potentially represents a buried accumulation of base metal mineralisation and as such represents an immediate priority for drill testing.

At the time of writing, historic data review and drill hole planning was underway.

22B Beulah Road	T:	(61 8) 8132 8800	ASX Code:	MTH
Norwood, South Australia, 5067	F:	(61 8) 8132 8899	Issued Shares:	422,389,211
www.mithrilresources.com.au	E:	[e-mail]

Figure 2: Billy Hills Zinc Project Location Plan showing Mithril tenements (green), zinc deposits and surface occurrences.

22B Beulah Road	T:	(61 8) 8132 8800	ASX Code:	MTH
Norwood, South Australia, 5067	F:	(61 8) 8132 8899	Issued Shares:	422,389,211
www.mithrilresources.com.au	E:	[e-mail]

Figure 3a (left): Billy Hills Surface Geochemistry Plan showing outcrop (grey) and major crustal scale fault zones (black lines) together with location of all historic rock chip samples (colour - coded by Zn+Pb%) and mapped surface zinc occurrences. Surface projection of Pillara Deposit and Pillara West Prospect shown in red.

Figure 3b (right): Billy Hills Induced Polarisation (IP) Chargeability Plan showing major crustal scale fault zones (black lines) together with location of all historic drill holes. IP Chargeability anomalies shown as either strong or moderate. Note that IP surveying has not been undertaken south of the Pillara Mine Lease 04/118. Surface projection of Pillara Deposit and Pillara West Prospect shown in red.

22B Beulah Road	T:	(61 8) 8132 8800	ASX Code:	MTH
Norwood, South Australia, 5067	F:	(61 8) 8132 8899	Issued Shares:	422,389,211
www.mithrilresources.com.au	E:	[e-mail]