STRATEGIC ENERGY RESOURCES LIMITED 19 January 2017‌‌

ACN 051 212 429

Level 4, 100 Albert Road Tel: (03) 9692 7222

South Melbourne VIC 3205 Fax: (03) 9077 9233

Quarterly Report to 31 December 2016

Figure 1: SER Exploration Projects

Strategic Energy Resources Limited (ASX Code: SER) is a diversified mineral exploration company and major shareholder of Ionic Industries Ltd and Valence Industries Ltd

MINERAL EXPLORATION SAXBY GOLD PROJECT

QUEENSLAND (SER 100%)

During the quarter, SER announced the generation of high grade gold drill targets at our 100% Saxby Gold Project in northwest Queensland. Historic drilling at Saxby includes high grade intersections of 17m @ 6.75g/t Au and 15m @ 9.09 g/t Au in two holes 190m apart. These intersections include higher grade zones of 9m @ 11.27g/t Au and 8m @ 15.1 g/t Au respectively.

SER has completed a detailed review of previous exploration at Saxby and concluded that previous drilling did not adequately test the potential demonstrated by the high grade intersections. Specifically, previous drilling failed to fully test structural and geophysical targets due to deviation (pronounced steepening) of inclined drill holes.

SER plans to drill several vertical drill holes surrounding the best intersections to test the extent and continuity of high grade gold at Saxby. Vertical holes are much less likely to deviate to the extent experienced with the earlier inclined drilling.

Figure 2: The Saxby Gold Project is located 165km NNE of Cloncurry in the Gulf Country of NW Queensland.

At Saxby, SER is targeting gold mineralisation hosted in basement rocks of the Eastern Succession of the Mt Isa Province buried beneath younger sedimentary cover of the Carpentaria Basin. The Eastern Succession has a long and proven record of mineral endowment.

Figure 3: Regional Geophysics showing magnetics (left) and gravity (right) Saxby Exploration History

In 2008, previous explorers Anglo American / Falcon Minerals were targeting magmatic Nickel - Copper - Platinum Group Elements (Ni-Cu-PGE) mineralisation by drill testing bedrock electromagnetic (EM) conductors when discovery hole SXDD005 hit high grade gold. Assays include 17m @ 6.75g/t gold from 631m to 648m.1

In 2010, farm-in partner AngloGold Ashanti drilled five holes (SXDD011-015) in the vicinity of SXD005 to test for gold mineralised structures away from discovery hole SXD005. The best results came from hole SXDD014 including 15m @ 9.09 g/t gold.2

Finally, in 2012, Falcon Minerals drilled four further holes (SXDD0016-0019) with disappointing results. The best result was from hole SXDD016 which included 1m @

26.1 g/t gold.3Falcon noted that "All holes in the drill program steepened significantly and this is a technical issue that needs to be resolved before drilling recommences."4

1 See Falcon Minerals Ltd (ASX: FCN) ASX Announcement of 28 January 2009: www.asx.com.au/asxpdf/20090128/pdf/31fqydr86ntvqm.pdf 2 See FCN ASX Announcements of 5 November 2010 (initial results) and 12 January 2011 (subsequent re-assay): www.asx.com.au/asxpdf/20101104/pdf/31tp5ss0zdtdnd.pdf and www.asx.com.au/asxpdf/20110112/pdf/41w4q8xyrpzv6h.pdf‌

3 See FCN ASX Announcement of 17 August 2012: www.asx.com.au/asxpdf/20120817/pdf/4282pm6klvrdqg.pdf 4 See FCN ASX Announcement of 17 July 2012:‌

http://www.asx.com.au/asxpdf/20120717/pdf/427g1cwpkgbpm0.pdf

Figure 4: Previous drilling at Saxby over EM response with high grade gold hits (yellow stars) and location of SER's proposed 2017 vertical drill holes in black dashed oval Way Forward and Proposed Drill Program

SER's analysis reveals drilling to date has not adequately tested the potential demonstrated by previous high grade intersections due to deviation of drill holes.

SER believes the high grade gold could be hosted in a variety of geometries within the basement. We believe pattern drilling the untested area is the most comprehensive way to evaluate various models based on geophysical and structural targets.

SER plans to drill several vertical drill holes surrounding the best intersections to test the extent and continuity of high grade gold at Saxby. Drilling is planned for the end of the wet season in early-mid 2017.

See our announcement of 7 December 2016 for further details regarding the geology and mineralisation at Saxby:

http://www.asx.com.au/asxpdf/20161207/pdf/43djpzwkmk8b60.pdf

Strategic Energy Resources Ltd. published this content on 19 January 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 30 January 2017 03:45:06 UTC.

Original documenthttp://www.strategicenergy.com.au/pdf/2017/20161231 - Dec 2016 Activities & 5B (SER) Final.pdf

Public permalinkhttp://www.publicnow.com/view/1A3593492F92622B752FE0A1B9B83C9D6B761CCE