Celsius Resources : Positive Scoping Study Completed on Opuwo Cobalt Project

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POSITIVE SCOPING STUDY COMPLETED ON OPUWO COBALT PROJECT

HIGHLIGHTS

• • Scoping Study confirms potential for a large scale and long-life operation.

• • Preliminary mine planning completed, examining various open pit and underground mining scenarios.

• • Sulphide concentrate produced from standard flotation methods.

• • Project to produce refined products including cobalt sulphate (or hydroxide/metal), copper metal and zinc sulphate by either autoclave or roasting methods, with the roasting method used as the base case for the purpose of completing the Scoping Study.

• • No deleterious elements identified that would affect the saleability or price of products.

• • Infrastructure components to leverage off existing regional infrastructure, including hydroelectric power and network of sealed roads.

• • Commenced high-level discussions with prospective offtake partners.

• • Pre-Feasibility Study (PFS) to commence immediately, scheduled for completion in Q3, 2019, including investigation of identified value engineering and process optimisation opportunities and the incorporation of an updated Mineral Resource Estimate, expected later in 2018.

Cautionary Statement

The Scoping Study is a preliminary technical and economic study of the potential viability of the Opuwo Project required to reach a decision to proceed with more definitive studies. It is based on low level technical and economic assessments that are not sufficient to support the estimation of Ore Reserves. Further exploration and evaluation work and appropriate studies are required before Celsius will be in a position to estimate any Ore Reserves or to provide any assurance of an economic development case.

The Scoping Study was based on material assumptions including assumptions about the availability of funding. While Celsius considers all of the material assumptions to be based on reasonable grounds, there is no certainty that they will prove to be correct or that the range of outcomes indicated by the Scoping Study will be achieved.

To achieve the range of proposed feasibility studies and potential mine development outcomes indicated in the Scoping Study, additional funding (beyond the PFS stage) will be required.

Investors should note that there is no certainty that Celsius will be able to raise funding when needed. It is also possible that such funding may only be available on terms that may be dilutive to or otherwise affect the value of Celsius' existing shares. It is also possible that Celsius could pursue other 'value realisation' strategies such as a sale, partial sale or joint venture of the project. If it does, this could materially reduce Celsius' proportionate ownership of the project.

Given the uncertainties involved, investors should not make any investment decisions based solely on the results of the Scoping Study.

Level 2, 22 Mount Street	P: [phone]
Perth WA 6000	F: [phone]
PO Box 7054, Cloisters Square,	[e-mail]
Perth WA 6850	www.celsiusresources.com.au

Celsius Resources Limited ("Celsius" or "the Company") is pleased to advise that it has completed a Scoping Study (Study) on its 95% owned Opuwo Cobalt Project ("Project") in Namibia. The results of the Study justify progression to a Pre-Feasibility level of Study at the Project, which will commence immediately.

The Study was completed with contributions from the following external consultants:

• • Metallurgy and Process Development: HydrometWA Mineral Consultants, Orway Mineral Consultants, SGS Australia, SENET, Gecko Namibia

• • CAPEX and OPEX estimates: Orway Mineral Consultants, SENET, Pivot Mining Consulting

• • Geology, Exploration and Resources: DMT Kai Batla, Gecko Namibia

• • Mining Studies: Pivot Mining Consultants, Auralia Mining Consulting

• • Environmental, Water and Social: SLR Consulting

• • Tailings Storage Facility Design: WWL Consulting Engineers and Scientists

• • Power: EMCON Consulting

The Opuwo Project hosts Indicated and Inferred Mineral Resources, and an Exploration Target for the West Zone. A portion of the Inferred Mineral Resources/Exploration Target for the West Zone were included in the Scoping Study, and while not anticipated to feature as a significant proportion early in the mine plan, in accordance with ASX Interim Guidance: Reporting Scoping Studies, the ASX Listing Rules and ASIC Information Sheet 214, as the respective proportions of Inferred Mineral Resource and Exploration Target currently defined are likely determining factors in assessing project economics, Celsius is currently prevented from reporting a production target or forecast financial information based on a production target.

The results of the Study provide justification for the Company to proceed to a Pre-Feasibility Study (PFS) on the Project. The PFS will be preceded by a trade-off study, the outcomes of which will more clearly define the Scope of Work for the PFS. The Company will update the market as the results of these studies become available.

Celsius Managing Director, Brendan Borg commented:

"The Project Scoping Study has identified that a potentially large and long-life operation is possible at Opuwo. The Study has identified two process routes that are technically viable, to produce downstream (or refined) products from the Opuwo Mineral Resource. Preliminary studies of environmental, social, power, infrastructure and water supply considerations indicate no significant impediments to the development of the Project. Further, a series of opportunities to enhance and more clearly define the economic value of the Project have been identified, and will form a key part of the Pre-Feasibility Study."

NEXT STEPS

The Opuwo Project Team has recommended, and the Board has resolved:

• • To proceed to Pre-Feasibility Study on the Project. The Pre-Feasibility Study will be preceded by the trade-off studies flagged in the Scoping Study. These will include, but are not limited to:

  • o Optimised mine planning on the extended strike length and increased resource expected in the updated Mineral Resource Estimate.

  • o Possible location of the refinery near Walvis Bay Port to limit logistics costs.

  • o Improved flotation recoveries and coarser grind size designed specifically for roaster feed concentrate, which is likely to reduce both CAPEX and OPEX estimates.

  • o Roaster/leach testwork, including confirmation of the feasibility of recovery of metal from the oxide mineralisation zone using the roaster processing method.

  • o Capital/operating cost trade-off for the different cobalt products.

• • To appoint Project specialist sub-contracting companies following full assessment of proposals received, including an overall Study Manager.

SUMMARY OF FINDINGS

The Scoping Study was designed to evaluate the potential for economic extraction of the cobalt, copper and zinc contained in the Opuwo Mineral Resource. A base case extraction rate was selected, to be mined by underground mining techniques, with the possibility of adopting a combination of open pit and underground mining techniques also investigated. A preliminary assessment was also undertaken of a higher extraction rate, and will be further evaluated as studies progress.

The Scoping Study was completed at a greater level of detail than a traditional Scoping Study, to evaluate a variety of processing methods, which included the development of flowsheets for autoclave leaching method, as well as evaluating a traditional roasting method of liberating the target metals for leaching. Flowsheets and preliminary cost estimates have also been developed for the production of cobalt sulphate heptahydrate, cobalt hydroxide or cobalt metal from either the autoclave or roasting method. All methods will produce copper metal and zinc sulphate as by-products. Additionally, the roaster method will produce sulphuric acid and power by-products. Celsius currently considers the roasting method to be the base case processing method, and will undertake additional studies during preparation of the PFS to further evaluate the autoclave processing method.

The Opuwo Cobalt Project is located in the Kunene Region of northern Namibia, close to the regional capital of Opuwo. The Project comprises Exclusive Prospecting Licences (EPLs) 4346, 4540, 4350 and 4351, all of which are registered in the name of Gecko Cobalt Mining Pty Ltd. All licences are current, and EPL 4346 (which contains the Mineral Resource) and EPL 4350 have been recently extended to September 2020. Gecko Cobalt Mining Pty Ltd is 95% owned by Celsius Resources Limited. For the purposes of this Scoping Study, Celsius has assumed that relevant EPLs will be converted to Mining Licences to permit mining for the assumed life of mine.

The minerals of value are contained in the Dolomitic Ore Formation (DOF), which is a moderate to steeply dipping mineralised zone that persists over an extensive strike distance and outcrops at surface.

The Study, including preliminary project capital expenditure estimates, mining and processing costs, has been completed to an accuracy of +/‐40%.

Potential open pit designs that were investigated contained a significant proportion of the oxide ore type, which demonstrated sub-optimal recoveries in the limited metallurgical test work done to date. Additional metallurgical test work is required to further investigate open pit opportunities, in conjunction with an updated mine plan incorporating the planned updated Mineral Resource. The Study therefore currently focuses primarily on underground mining as the base case.

The proposed plant comprises an initial crushing, milling (SAG + ball), flotation concentrator and options of roast leach and autoclave leach, to produce a variety of products as described above. The Opuwo DOF Mineral Resource represents a deposit with potential economic extraction.

The Study team included the Celsius team, supplemented by: DMT Kai Batla for the Mineral Resource Estimate; Pivot Mining Consulting for the Mining Studies; Orway Mineral Consulting for the concentrator test work and design assessment; and HydrometWA Mineral Consulting and SENET Consulting for the hydrometallurgical studies. SLR Consulting have carried out an initial social and environmental screening assessment. The estimation of capital costs and operating costs were prepared by the relative specialist consultants and consolidated by the Celsius Project Team.

A real US dollar (USD) financial model architecture was developed to assess the economic options for the Project and assist Celsius in designing future Project Studies.

The following preliminary schedule of the next steps is subject to available funding (beyond Pre-Feasibility Study), positive outcomes for the Pre-Feasibility Study and Feasibility Study, and favourable timelines for permitting (Table 1):

Table 1: Forward Development Timeline

Milestone	Target Timeline
Completion of Pre-Feasibility Study	Q3 2019
Completion of Feasibility Study/Decision to Mine	H2 2020

GLOBAL MINERAL RESOURCE

Resource modelling and estimation has been completed by a Competent Person as defined by the JORC Code, from independent consultants DMT Kai Batla. This Maiden Indicated and Inferred Mineral Resource has an estimated 112.4 million tonnes, grading 0.11% cobalt, 0.41% copper and 0.43% zinc, at a cut-off grade of 0.06% cobalt (Table 2). The Mineral Resource was announced on 16 April, 2018, with supplementary information released on 13 June, 2018.

Table 2: JORC Compliant Indicated and Inferred Mineral Resources

Category	Ore Type	Cobalt Cut-off	Tonnage	Cobalt	Copper	Zinc	Contained Cobalt
(ppm)	(Mt)	(%)	(%)	(%)	(t)
Indicated	Oxide	600	3.8	0.10	0.39	0.36	3,900
	Transition - Sulphide	600	1.6	0.10	0.42	0.38	1,700
	Fresh - Sulphide	600	66.5	0.11	0.42	0.41	73,700
TOTAL INDICATED		600	72.0	0.11	0.42	0.41	79,300
Inferred	Fresh - Sulphide	600	40.5	0.12	0.41	0.46	46,900
TOTAL		600	112.4	0.11	0.41	0.43	126,100

* Note that minor rounding errors occur in this table.

EXPLORATION TARGET - WEST ZONE

In addition to the Opuwo Mineral Resource, an Exploration Target was released for the West Zone (Table 3/Figure 1) on 17 October, 2018. Data from 52 holes drilled to the west of the existing Mineral Resource has enabled the Company to generate an additional Exploration Target of between 34 and 51 million tonnes, grading approximately 0.08% - 0.18% cobalt, 0.26% - 0.62% copper, and 0.35% - 0.82% zinc. It is noted that the potential quantity and grade is conceptual in nature, and that there has been insufficient exploration to estimate a Mineral Resource, and it is uncertain if further exploration will result in the estimation of a Mineral Resource for this zone.

Table 3: Exploration Target - Opuwo Cobalt Project (West Zone)

Opuwo Project Exploration Target - West Zone*
Area	Tonnage Range (MT)	Co range (%)	Cu range (%)	Zn range (%)
West	34 - 51	0.08 - 0.18	0.26 - 0.62	0.35 - 0.82
TOTAL	34 - 51	0.08 - 0.18	0.26 - 0.62	0.35 - 0.82

* Exploration Target for the West Zone is in addition to the existing JORC Compliant Mineral Resource of 112.4 MT grading 0.11% cobalt, 0.41% copper and 0.43% zinc, at a cut-off grade of 0.06% cobalt.

Figure 1: Existing JORC Compliant Resource and West Zone Exploration Target