Mithril Resources : • December 2016 Quarterly Activities Report

Quarterly Report

For the Period Ending 31 December 2016

Key Points Lignum Dam Project (Gold / Nickel)

• Assay results awaited for an 80-hole (2,524 metres) Aircore drilling program undertaken during the Quarter.

• Project lies along strike from the Lindsay's Gold Mining Centre and the high-grade Silver Swan Nickel Deposit.

  Coompana (Nickel - Copper)

• Mithril and OZ Minerals Limited (ASX: OZL) exploring South Australia's far western Coompana Province for magmatic nickel - copper - PGE deposits.

• Target generation continued with re-logging of historic drill core, and interpretation of existing geological and geophysical datasets.

• Target generation aims to identify priority targets for geophysical and drill follow-up in 2017

  Duffy Well (Gold)

• Assay results awaited for a 53-hole (2,807 metres) Aircore drilling program undertaken by Doray Minerals' (ASX: DRM) during the Quarter.

  Exploration Outlook

• Ongoing evaluation of the Lignum Dam Project, as well as continuation of Coompana target generation activities will be the primary focus for the March 2017 Quarter.

  Corporate and Cash

• Cash reserves of $0.53M at 31 December 2016.

22B Beulah Road	T:	(61 8) 8132 8800	ASX Code:	MTH
Norwood, South Australia, 5067	F:	(61 8) 8132 8899	Issued Shares:	686,483,065	Page 1 of 6
www.mithrilresources.com.au	E:	[e-mail]	Market Capital:	A$4.53 million

Exploration Overview

Mithril Resources ("Mithril") and its joint venture partners are exploring for gold, nickel and copper throughout the Kalgoorlie and Meekatharra Districts of Western Australia, and nickel- copper-PGE's throughout the Coompana Province of South Australia (Figure 1).

During the December 2016 Quarter (the "Quarter") Mithril carried out an 80-hole (2,524 metres) Aircore drilling program at Lignum Dam (Kalgoorlie) and continued target generation activities at Coompana.

Doray Minerals (ASX: DRM), Mithril's gold exploration partner at Duffy Well (Meekatharra) carried out a 53-hole (2,807 metres) Aircore drilling program, and Chesser Resources (ASX: CHZ) carried out gold exploration activities at Kurnalpi (Kalgoorlie).

Corporate

Figure 1: Project Location Plan

During the Quarter, the Company spent $0.24M on its exploration activities outlined in this report and at 31 December 2016, the Company had cash reserves of $0.53M.

During the Quarter, the Company raised an additional $545,400 via a Share Purchase Plan (SPP) under which, new shares were issued at a price of $0.005 (0.5 cents) and the Company's Directors took up their full entitlement.

Funds raised will be used to advance targets at the Lignum Dam Project, fund ongoing target generation activities and for working capital purposes.

Following the SPP, Mithril has 686,483,065 fully paid ordinary shares on issue

Lignum Dam Project (Gold / Nickel) (Mithril 100%)

During the Quarter, the Company completed an 80-hole (2,524 metres) Aircore drilling program over gold and nickel sulphide targets at Lignum Dam (located 50 kilometres north-northeast of Kalgoorlie, WA - Figures 1 and 2).

With an area of approximately 270km², Lignum Dam covers a package of gold and nickel prospective Archaean mafic, ultramafic, and felsic rocktypes directly along strike from the Lindsay's Gold Mining Centre and the high grade Silver Swan nickel deposit.

At the time of writing, assay results were awaited for the drilling.

Coompana Project (Nickel-Copper-PGE's) (Mithril can earn 20% / OZ Minerals 100%)

Mithril and OZ Minerals ("OZ Minerals" - ASX: OZL) are exploring seven exploration licences (EL's 5837 to 5843 - 6,435km² Figure 4) in South Australia's far western Coompana Province for magmatic nickel - copper sulphide deposits. Exploration is carried out under the terms of a Heads of Agreement whereby Mithril will undertake a

target generation exercise at Coompana in the first instance, with a view to identifying potential drill targets on the tenements. OZ Minerals will invest $250,000 as part of the stage one targeting.

If Mithril identifies drill targets which are acceptable to both parties, then negotiations will advance to a formal joint venture to undertake the exploration, at which point Mithril can elect to earn a 20% interest in the project by funding $400,000 of a $2M drilling program with the balance funded by OZ Minerals.

If the partnership extends to the drill testing phase, OZ Minerals will assist Mithril Resources to undertake a capital raising in support of the program.

During the Quarter, Mithril continued target generation activities (comprising re-logging of historic drill core, and interpretation of existing geological and geophysical datasets) with the aim of identifying priority targets for geophysical and drill follow-up during 2017.

Duffy Well Project (Gold) (Mithril 100%, Doray Minerals earning an initial 51% and operating)

At Duffy Well, Doray Minerals Limited ("Doray" - ASX: DRM) is earning an initial 51% interest in Mithril's Duffy Well Project by completing expenditure of $300,000 within two years (by 3 November 2017) and can elect to earn an additional 34% interest by completing further expenditure of $200,000 within another one year (in total 85% by spending $500,000 over three years).

Duffy Well (EL51/1649) is located 30 kilometres east of Meekatharra WA (Figures 1 and 3) and covers the interpreted southern extension of the Gnaweeda Greenstone Belt where Doray has intersected high-grade gold mineralisation in RC drilling at the Turnberry Prospect including 3m @ 10.1g/t gold from 149 metres, 5m @ 17.4g/t gold from 71 metres, and 4m @ 17.9g/t gold from 45 metres (Doray ASX Announcement dated 11 June 2015).

During the Quarter, Doray carried out a 53-hole (2,807 metres) Aircore drilling program to test multiple gold targets identified from aeromagnetic data interpretation and a review of previous exploration at Duffy Well (which comprises reconnaissance RAB and aircore drill traverses with little or no follow-up).

The targets are typically characterised by zones of structural complexity with coincident bedrock gold (+50ppb) and arsenic (+100ppm) anomalism within wide-spaced drillholes.

At the time of writing, assay results were awaited for the drilling. Due to high workloads at the laboratory, Doray are experiencing delays in the receipt of assay results for a number of their recent drilling programs.

Kurnalpi Project (Gold / Nickel) (Mithril 100%, Chesser Resources earning an initial 51% and operating)

At Kurnalpi, Chesser Resources Limited ("Chesser" - ASX: CHZ) is earning an initial 51% interest in Mithril's Kurnalpi Project by completing expenditure of $150,000 within two years (by 5 November 2017) and can elect to earn an additional 29% interest by completing further expenditure of $100,000 within another two years (in total 80% by spending $250,000 over four years).

The Kurnalpi Project tenements (EL28/2506 and PL28/1271 - located 60 kilometres north east of Kalgoorlie, WA - Figures 1 and 2) cover Archaen ultramafic / mafic sequences prospective for both lode gold and nickel sulphide mineralisation.

During the Quarter, Chesser conducted a small program of auger geochemical sampling over a gold target that had been identified from a review of historical exploration data.

At the time of writing, the results of the work were awaited.

Other Projects

No field work was undertaken during the Quarter on the following projects: Grey Dam South (Mithril 100%), Nanadie Well (Mithril 100% and earning up to 75%), Leaky Bore (Mithril 100%), and Spargos Reward (Mithril 35%).

Exploration Outlook

Ongoing evaluation of the Lignum Dam Project, as well as continuation of Coompana target generation activities will be primary focus for the March 2017 Quarter.

Figures 2 (left) and 3 (right): Kalgoorlie and Meekatharra Project Locations