VDM : Copper Mineralisation Observed in 38 of 41 Holes

ASX ANNOUNCEMENT

3 December 2018

Cachoeiras do Binga Copper Project Update Copper Mineralisation Observed in 38 of 41 Holes

VDM Group Limited (VDM or the Company) (ASX: VMG) is pleased to provide the following update with respect to exploration at the Company's Cachoeiras do Binga (CdB) Copper Project in Angola (65% owned in VDM).

The first stage of the Phase One Drilling Program has been completed with a total of 41 diamond core holes having been drilled for a cumulative total of 3,903 metres.

Twenty (20) holes were drilled in Areas 1, 2 and 3 to verify historical information; whilst twelve (12) holes were drilled in Area 4 and nine (9) holes in Area 5, respectively, with the holes in Areas 4 and 5 for investigating targets generated from geological mapping, geochemical and geophysical information.

The depths of the completed diamond core holes varied from 31 metres to 273 metres with an average depth of 95 metres. A list of the hole collars is included at Appendix A.

Copper mineralisation is visible in drill cores from 38 holes of the 41 holes. Apparent malachite and its variations showing green and blue can be easily observed in the drill cores, refer images following. According to the geological logs and the fast analyser used in the field, the interceptions varied from few meters to more than ten meters, but this needs to be confirmed by the chemical analyses of core samples.

A total of 843 samples have been collected from the half cores of the mineralised intervals and boundaries. The samples were crushed and split following a standard operating procedure. Paperwork is being finalised for despatch of the samples for chemical assay and the results are expected in Q1, 2019.

The Phase One Drilling Program in 2018 is now suspended due to the raining season, and will be re-launched in 2019 when weather permits access to the project area. The next stage of Phase One Drilling Program can be expected to target further parts of Areas 4 and 5 and follow-up the most prospective assay results.

BOARD & MANAGEMENT

Mr Luk Hiuming NON-EXECUTIVE CHAIRMAN

Dr Dongyi Hua

EXECUTIVE DIRECTOR OF MINING

Mr Michael Fry DIRECTOR

COMPANY SECRETARY

REGISTERED OFFICE

Suite 2, Level 2, 123 Adelaide Terrace, East Perth, WA 6004

POSTAL ADDRESS

PO Box 3347

East Perth, WA 6892

CONTACT DETAILS Tel: [phone]

WEBSITE vdmgroup.com.auSHARE REGISTRY Computershare Investor Services Pty Limited

GPO Box 2975 Melbourne, VIC 3001 Tel: [phone]

ASX CODE VMG

Fo r pe rs on al us e on ly

Drill-core of selected holes from Phase One Drilling Program at CdB Copper Project in Angola

For further information please contact:

Michael Fry Company Secretary VDM Group Limited [phone]

Competent Person Statement

The information in this release that relates to sampling techniques and data, exploration results, geological interpretation and Exploration Targets, Mineral Resources or Ore Reserves has been compiled by Mr Pengfei Xiao from SRK Consulting China Ltd, a Member of the Australian Institute of Mining and Metallurgy (MAusIMM). SRK is engaged by VDM Group Limited providing independent consulting services and Mr Xiao had twice visits to the CdB Project, respectively in May and November 2018.

Mr Xiao has sufficient experience of relevance to the styles of mineralisation and the types of deposits under consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Xiao consents to the inclusion in this report of the matters based on information in the form and context in which it appears.

Forward looking statements

Information included in this release constitutes forward-looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as "may", "will", "expect", "intend", "plan", "estimate", "anticipate", "continue", and "guidance", or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates and expected costs or production outputs.

Forward looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance and achievements to differ materially from any future results, performance or achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licences and permits and diminishing quantities or grades of reserves, political and social risks, changes to the regulatory framework within which the company operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation.

Forward looking statements are based on the Company and its management's good faith assumptions relating to the financial, market, regulatory and other relevant environments that will exist and affect the Company's business and operations in the future. The Company does not give any assurance that the assumptions on which forward looking statements are based will prove to be correct, or that the Company's business or operations will not be affected in any material manner by these or other factors not foreseen or foreseeable by the Company or management or beyond the Company's control.

Although the Company attempts and has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in forward looking statements, there may be other factors that could cause actual results, performance, achievements or events not to be as anticipated, estimated or intended, and many events are beyond the reasonable control of the Company. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Forward looking statements in these materials speak only at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, in providing this information the company does not undertake any obligation to publicly update or revise any of the forward-looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.

Appendix A: Drill Program Information

Image 1: Map showing location of drill holes _Area4 _Area3

Image 2: Map showing location of drill holes _Area 5