Tasmania Mines : Ore Reserve Report January 2017

-

TASMANIA MINES LIMITED

ABN 45 009 491 990

Registered office Aurora Place

Level 33,88 Phillip Street

Sydney NSW 2000 Australia

Telephone [phone]

Facsimile [phone]

In reply please refer: Tas/2017

16 February 2017

The Manager Announcements Australian Stock Exchange Limited GPO Box 100A

Hobart TAS 7001

Technical Report

Dear Sir/Madam,

Tasmania Mines Limited (TML) has today released an updated Technical Report as at 31 December 2016 prepared by Mr A.O. Fudge of Polberro Consulting for Kara No. 1 reserve estimate (attached).

Yours faithfully

Tasmania Mines Limited

/( ,/)

Ken Broadfoot

Director

Tasmania Mines Kara No 1 Magnetite Deposit Ore Reserve Report January 2017

Kara No 1 SE Pit & Haul Road

Prepared by:

Of: -

Alan D Fudge MSc BSc MAusIMM

Polberro Consulting Table Cape, TAS, 7325 Tel [phone]

[e-mail]

On behalf of: -

Tasmania Mines Ltd

Executive Summary

This reserve estimate is produced for Tasmania Mines for annual reporting and audit purposes. The Kara No 1 reserve has been estimated based upon the January 2017 digital resource model as described in both the December 2014 Kara No 1 Resource report and January 2017 technical memorandum (Resource and Exploration Geology) utilising an FeO>30% mineralised cut off (see Appendix 6). References to global in-situ resource in this report correspond to the January 2017 digital resource model.

Reference to minable resource referred to in this report represents the FeO>30% component of the global in-situ resource that lies above the current pit life of mine (LOM) pit DTM and which has not been sterilised by its location.

• Kara No 1 Global Resource is 14,600,000 tonnes at 49.5% FeO

• Kara No 1 Minable Resource is 10,304,000 tonnes at 50.2% FeO
• Kara No 1 Total Ore Reserve is 9,974,000 tonnes at 49.7% FeO

The Kara No 1 pit life based upon the current production rate of 400,000 tonnes of ore per annum is 25 years.

This reserve estimate is derived from sectional perimeters which represent realistic mining shapes and include planned waste and low grade dilution. Reserve perimeter sets utilise, but are not wholly constrained by, the LOM pit shape as a guide. The reserve estimate excludes 95,000 tonnes of inferred resources (59.5% FeO) that lie within the LOM pit boundary and will be mined during the normal operation of the open pit.

It is estimated that 7% of the material reporting to the reserve within the pit design shell contains material classified as oxidised. It is currently considered that up to 30% of this oxidised material is unsuitable for generation of a magnetite product and may have weathered to limonite, goethite, haematite etc. The estimate for oxide material has been adjusted in this reserve estimate accordingly and a 30% reduction factor is applied to oxide reserve estimates reflecting current applied practice in the open cut which indicates an increased throughput of oxidised ore compared to 2014 and 2015.

Table of Contents

1. Executive Summary 2

1. Introduction 4

2. Location 5

3. Geology 6

4. History 8

5. Production 9

6. Processing 10

7. Reconciliation 11

8. Resource Estimates 12

9. Reserve Estimation 13

10. Mineralised Resources 15

11. Current and Future Work 18

12. References 19

13. Limitations and çonsent 20

Appendices

Appendix 1 Conversions Used 21

Appendix 2 Competent Person Statement 23

Appendix 3 Reserve Estimation Worksheets 24

Appendix 4 Break Even estimations 39

Appendix 5 Sensitivity Analysis 42

Appendix 6 JORC 2012 Check List 44

List of Figures

Figure 1 Site Location 5

Figure 2 Ore and Waste Production Chart 2008 to 2015 9

Figure 3 Location of Deposits 17

Figure 4 Optimal pit and design pit shell ‐isometric 37

Figure 5 Optimal pit and design pit shell West‐East section 37

Figure 6 Grade tonnage‐curve 41

Figure 7 Metal Price Sensitivity 43

List of Tables

Table 1 Reconciliation Estimate 11

Table 2 Kara No 1 Global Resource Estimate 12

Table 3 Kara No 1 Minable Resource Estimate 12

Table 4 Kara No 1 Mining Reserve Estimate 14

Table 5 Tasmania Mines Site Mineral Resource Summary 16