NQ Minerals PLC (LON:NQMI)

Business Strategy

At Ukalunda, NQ Minerals has what the Directors view as an advantage with 35 years’ worth of exploration history, which the Directors believe will fast track exploration on the most prospective areas of the tenement that includes the old mines.

NQ Minerals possess some advantages in the Ukalunda region as it has already established local exploration expertise and experience working in this area. The Directors believe that Group is likely to benefit from the advances made in exploration techniques since the previous work was undertaken. There have been some significant advances in geophysics, such as modern airborne and ground magnetics systems, aided by Thermatic Mapper (TM) imagery that uses radar data to map and explore mineral deposits. This is in addition to the extensive geochemical database along with more up to date models of mineralization.

Opportunities for the Group

The Directors consider that NQ Minerals has a distinct advantage arising from the previous exploration work that has been carried out on the tenements. This has a resulted in a valuable database that will allow the team to target spending to achieve the most efficient exploration and improve the chances of success. The short-­‐term strategy is aimed at increasing value by targeted exploration and the easiest way to add value is by drilling.

There are three main drill targets in the Ukalunda tenement being Sunbeam, Carrington and Birthday Gift. There are various other options but those three prospects are considered by the Directors to be the first priority.

The Directors consider that the previous work carried out on Ukalunda places the project in the ‘Pre-­‐ Discovery Stage’ as represented on the above chart. The ‘Pre-­‐Discovery Stage’ is where early discoveries can provide opportunities for capital growth as a stock is driven up the value curve by positive results and is well advanced from the ‘Concept Stage.’

Once discoveries have been made, step-­‐out drilling will commence to establish a resource footprint followed by infill drilling to increase the statistical confidence that is required for the definition of resources under the standards of the Australasian Joint Ore Reserves Committee (‘‘JORC’’). Although 10,000 metres of drilling has been carried out historically, these results are out of date for the determination of mineral resources and ore reserves to the Australasian Code for Reporting of Exploration Results, Mineral Resources, and Ore Reserves (‘‘JORC Code’’).

A JORC report allows a more reliable value to be placed on a junior mining company by peer comparisons. As further drilling is carried out on a tighter matrix, the quality of the resources under JORC can improve as geological certainty improves taking more ounces/tonnes of resources from an inferred mineral resources category to an indicated or measured category which acts to increase the value of the junior mining company.

The Directors consider that 2015 and 2016 are likely to see a healthy news flow from both the Ukalunda and Square Post projects as exploration proceeds and any positive results should allow value to be added. The management has a proven track record not just in locating properties with valuable resources but, more importantly, in developing these projects to bankable stage.

Hellyer Project - nq minerals

NQ Minerals Plc ("NQ Minerals" or “the Company”) (NEX: NQMI) (OTCQB: NQMLF) has entered into an agreement to acquire all of the issued and outstanding shares of Keen Pacific Limited (“Keen”), along with its wholly-owned subsidiaries Ivy Resources Pty Ltd and Hellyer Gold Mines Pty Ltd (the "Contract"). The acquisition would see NQ Minerals wholly own the prospective Hellyer Gold Mine in Tasmania, Australia and is in line with the Company’s strategy of becoming a near-term revenue generating gold and base metal production company.

NQ Minerals’ acquisition of the Hellyer Gold Mine allows the opportunity to fully process and bring the tailings to account. Held within four separate areas, the tailings total 11.24 mt, and comprise a JORC compliant resource estimated at 9.5 mt which is host to Gold at 2.61 g/t Au for 796,000 oz Au, Silver at 104 g/t Ag for 32 m oz Ag, Lead at 3.03% Pb for 287,800 tonnes and Zinc at 2.5% Zn for 237,900 tonnes. In addition to these tailings, the Hellyer Gold Mine assets include a large pre-existing mill facility and full supporting infrastructure, including a direct rail line to port. It also includes a fully permitted Consolidated Mining Lease CML 103M – 1987.

NQ Minerals Chairman Brian Stockbridge said, “The Hellyer Gold Mine will be a flagship project for NQ Minerals and is expected to see us transform into a near-term producer within a 12 month time-frame. First work will involve the refurbishment of the existing operating facilities in order to extract and treat the large high-grade tailings deposit on site and produce three marketable concentrates (lead, zinc, gold/silver/pyrite). The project is expected to be producing within a short time period and offers the potential for attractive returns with a quick payback of capital. The Board believes Hellyer is a world-class, company-maker project that blends well with our North Queensland assets and our long term goal to become a significant gold and base metal producer in Australia.”

Highlights:

• Permitted project with life of mine revenues exceeding AU$1.3 bn (US$1.033bn)
• Post Tax IRR 130%
• Post Tax NPV AU$276 m (US$210m)
• 56% gross margin
• Low start-up capex requirement – AU$20 m
• 10-year mine life
• Existing fully covered, fully operable 1.6mtpa fully automated flotation plant
• Undercover concentrate loading station
• Existing railway from plant to port
• Existing port concentrate housing, handling and loading facilities
• Existing tailings dredge
• Skilled available workforce
• Short start up time period

Benefits of the Transaction for NQ Minerals Shareholders:

• Adds a JORC compliant resource to NQ Minerals’ portfolio of assets in a premier geopolitically stable mining jurisdiction;
• Enhances NQ Minerals' development and production pipeline with the potential to commence production at the Hellyer property within 12 months;
• Provides near term cash flow; and
• Aligns well with the experienced and disciplined management team that has been formed to optimise the project outcomes.

Ukalunda Project

The Ukalunda tenement (EPM 18019 which is legally and beneficially owned by Circle Resources) lies midway between the Lake Dalrymple/Burdekin Dam and the historic Wirralie gold mine, which produced 1.1 million ounces of gold. The Ukalunda permit area is easily accessible. The tenement is located near the mining town known as Charters Towers, which offers the Company labour and materials. Although the exploration staff will camp in the bush whilst working, it is possible to get to Charters Towers and back in a day. Any other services required are available in Townsville, the third largest city in Queensland, which is approximately 45 minutes away by helicopter.

The Ukalunda project area contains multiple shows of mineralisation that are the same as other mineralisation shows discovered in mining districts around the world that host major ore bodies. This suggests that a major ore body may be present in this district. Historical wide-­‐ranging exploration has been carried out at the Ukalunda permit area, which discovered some areas of rich mineralisation of gold, silver and a number of associated base metals.

There are a number of historic mines and advanced prospects that have been explored for more than 30 years on the Ukalunda tenement area. This indicates that the Ukalunda tenement area is the most prospective in the district.

Map to Mine, an independent mining exploration services company and the Competent Person reported that the Ukalunda tenement is in good standing. There are 23 sub-­‐blocks in the permit, which cover an area totalling 64.4km2. To date, 33 prospects have been identified across the tenement area by wide-­‐scale exploration of stream sediments as well as rock chip sampling. Subsequently, drilling programs tested the targets that had been identified in the earlier exploration work. Certainly the best drill intersections so far have demonstrated what appear to be good grades and widths of gold, silver, copper, lead, zinc, bismuth and stibnite.

Bismuth is used mostly in chemicals for the pharmaceuticals, pigments and coatings industries as well as in alloys as a substitute for lead. Stibnite is an important source of the semimetal (a chemical element with properties between a metal and a non-­‐metal) antimony, which is used in cosmetics as kohl, safety matches and medicines.

There are a total of 33 prospects in the Ukalunda permit. Twenty-­‐one of these prospects have been named and twelve remain unnamed. Once a discovery has been made, the property containing the discovery is called a prospect.

The Company’s attention is focused on the most prospective area of the permit where principle prospects are probably the three larger historical deposits which are represented by the following polymetallic historic mines: Sunbeam Silver Mine, Carrington Silver Bismuth Mine and Pyramid Lead Silver Mines. A total of 600,000 ounces of silver were mined from the Sunbeam Mine with very high grades of up to 37kg/tonne.

Historical Exploration

Discovery and historical mining of polymetallic Ag-Bi-Pb veins associated with the Pyramid ring structure. The larger historical deposits are the Sunbeam Mine which produced 600,000 ounces of silver with grades of up to 37 kg/tonne, the Carrington Ag Bi and Pyramid Pb-Ag mines. Drilling by Endeavour at Sunbeam returned narrow veins of barite/galena and minor tetrahedrite. The highest grade intersections were 27.2m @ 290.7 ppm Ag; 11.4m @ 5.1 ppm Ag. 1999 drilling by Rhodes Mining returned 13m @ 214 ppm Ag, 7m @ 131 ppm Ag, 21m @ 29.5 ppm Ag (Wolstencroft, 1999).

More recent exploration testing of this style of mineralisation targeted the Birthday Gift and Renegade prospects where Sons of Gwalia returned results such as 3m @ 3.55% Pb, 25 ppm Ag, 12m @ 0.87% Pb, 2.36% Zn, 39 ppm Ag from Birthday Gift and 11m @ 17 ppm Ag from Renegade. Similarly at Origin Hill/Calvary Hill, Sons of Gwalia drill results include 3m @ 0.65 ppm Au, 1.2% Cu, 0.4% Pb, 0.4% Zn and 323 ppm Ag, 4m @ 115 ppm Ag; 0.4% Cu; 22m @ 17.5 ppm Ag; 1m @ 0.48 ppm Au.

At Mt Wyatt a large area of intrusive related veining and base and precious metal mineralisation has received the attention of explorers since its discovery as a large scale stream sediment anomaly by Longreach Metals in 1969. Chalcopyrite, galena and sphalerite and pyrite veinlets were intersected in holes targeting soil anomalies in altered tonalite. Scattered gold results have been returned by various companies working in the area. Best results include 2m @ 3.7 ppm Au, 4m @ 0.8 ppm Au, costeans of 1m @ 2.77 ppm Au. This system has been targeted as the periphery of a major intrusive related mineralised system.

Follow up of BCL stream sediment gold anomalies has lead to the discovery of several gold bearing mineralised systems within the proposed EPM application or just outside.

The most significant systems located to date are:

• Python: silica sericite pyrite altered fragmental volcanics returned 4m @ 2.48 ppm Au and 4m @ 4.42 ppm Au from costeans.

• Polka Dot: thin gossanous zone within volcaniclastics. Drilling of silica sulphide lode returned 8m @ 0.32 ppm, 8m @ 1.9 ppm Au.

• Mt William Philpott: quartz veinlets associated with rhyolite dykes. 6m @ 4.58 ppm Au and 15m @ 1.0 ppm Au from trenching, ditch witch results 24m @ 0.26 ppm Au.

Square Post

The Square Post tenement (EPM 18510 which is legally and beneficially owned by Circle Resources) lies close to the Flinders Highway, 10 kilometres north north east of Mingela and 50 kilometres south of Townsville. permit EPM 18510 covers the edge of the southern arm of the Harvey Range which is a major feature rising from the coast plains in the East to 536 metres at Mt Sugarloaf. This range is deeply incised with a ‘‘V’’ shape along its eastern edge but sloping more gently to the west. The area is considered to be underexplored due to its rugged terrain.

The permit consists of 47 sub-blocks covering an area of around 168km2. Map to Mine have reported that the Square Post tenement is in good standing.

The Square Post exploration permit (EPM 18510) contains two styles of mineralisation:

• breccia hosted at Breccia Knob (TOHB), and

• quartz vein hosted in the Blue Doe – June Ellen area.

Large areas of the EPM remain untested by modern exploration. Historical gold production within the tenement area has had grades of 33.76g/t Au (1887-1910) to 331.4g/t Au (1934-40).

Assays in more recent years have confirmed the strong presence of gold in the system, including rock chip samples of 29.6g/t Au at Breccia Knob and 79.3 g/t Au at Blue Doe.

Remarkably the Breccia Knob gold-silver prospect has not yet been drilled despite >1 M. oz breccia-hosted gold producers being present in the district. These intrusion related breccias are typically zoned from high silver near surface to high gold at depth.

Breccia Knob was mapped and sampled, establishing the high silver:gold ratio mineralisation with associated anomalous Zn, Pb, As, Bi, and Te. This confirms that the outcropping mineralisation is near the top of an intrusion-related system and suggests the potential for mineable gold ore at depth. Five drill holes are planned in this area – to a depth of 400m.

The narrow mesothermal gold-silver veins are lower priority targets.

Walter Doyle (Director, CEO and Founder)

Brian Stockbridge (Chairman)

Roger Jackson (Executive Director)

Colin Sutherland (CFO & Director)

Allen Ambrose (Non Executive Director)

Greg Lane (Non Executive Director)

Adrian Lungan (Non Executive Director)

Frederick Bryant Smart (Non Executive Director)

Mike Barden (Project Consultant)

Bob Quilliam (Hellyer - General Manager Operations)

NQ Minerals PLC

Share symbol: NQMI 
Number of Ordinary Shares in issue: 320,695,024 
Percentage of shares not in public hands: 63.38%

Significant Shareholders (as of 25 October 2018).

* Walter Doyle, CEO, is a benficiary of Tarver Partners

** Adrian Lungan, NED, owns 100% of Alpha Prime Investments Limited

It is anticipated there are 59,522,629 shares in public hands representing 36.62% of the entire share capital..

NQ Minerals Registered office

PKF LITTLEJOHN CORPORATE SERVICES LIMITED

Company number 04138491

c/o PKF Littlejohn

2nd Floor

1 Westferry Circus

Canary Wharf

London

E14 4HD

Principal place of business

Level 6, RSL Centre

9 Beach Road

Surfers Paradise

Queensland 4217

Australia

Investor Inquiries

For further information on NQ Minerals, please contact

Kris Kottmeier

VP Corporate Development

[email protected]

+ 44 (0) 20 3637 6522 (UK)

+ 1 (604) 506 6502 (North America)

NQ Minerals Registered office

PKF LITTLEJOHN CORPORATE SERVICES LIMITED

Company number 04138491

c/o PKF Littlejohn

2nd Floor

1 Westferry Circus

Canary Wharf

London

E14 4HD

Principal place of business

Level 6, RSL Centre

9 Beach Road

Surfers Paradise

Queensland 4217

Australia

Investor Inquires

Brian Stockbridge

Non – Executive Chairman

[email protected]

+ 44 (0) 7876 888011 (United Kingdom)

---
Colin Sutherland

Chief Financial Officer

[email protected]

+ 1 (416) 452 2166 (North America)

Corporate Adviser
Arden Partners plc
125 Old Broad Street
London, EC2N 1AR

Broker
Arden Partners plc
125 Old Broad Street
London, EC2N 1AR

Solicitors to the Company
DAC Beachcroft LLP
100 Fetter Lane
London EC4A 1BN

Auditors to NQ
Dr. Nigel Purves
Registered company auditor number: 872
C/- AAA Business Accountants Pty Ltd
Suite 2-3 Ground Floor 3 Short Street
Southport, Queensland 4215 Australia

Auditors to NQ
HW Fisher & Company
Acre House, 11-15 William Rd, Kings Cross
London NW1 3ER, UK

Reporting Accountants
MAH Chartered Accountants
5 Wormwood Street
London EC2M 1RQ

Registrars
SLC Registrars
42 – 50 Hersham Road Walton-on-Thames
Surrey KT12 1RZ