Cape Lambert Resources : Market Update - Kipushi Project

Market Update - Kipushi Tailings Projects

Highlights

• • Assays from Tailings drilling imminent;

• • Discussions with Financiers and Offtakers continuing; and

• • Funded EPCM contract in discussion.

Australian resources and investment company, Cape Lambert Resources Limited (ASX: CFE) (Cape Lambert or the Company) is pleased to provide an update on the progress of the Kipushi Cobalt-Copper Tailings Project (Kipushi Project) in the Democratic Republic of Congo (DRC).

The Kipushi Project, located near the town of Kipushi approximately 25km from Lubumbashi, refer Figure 1, involves the reprocessing of cobalt-copper tailings contained in the Kipushi Tailings Storage Facility (Kipushi TSF) and is operated by Soludo Lambert Mining SAS (Soludo Lambert), under a 50/50 joint venture arrangement between local entity Paragon Mining SARL (Paragon) and Cape Lambert. Paragon has a 70% interest in the Kipushi Project via a contract with La Patience SPRL that gives it the right to exploit and process the tailings from the Kipushi TSF and sell the product.

Early October 2018 drilling contractor, Solutions for Africa, completed 47 holes for a total of 432m. Samples were dispatched to the laboratory of ALS in Lubumbashi for assay with the results expected in the coming week. Once received, work will commence on preparing the Mineral Resource estimation for the tailings dam.

Preliminary work has been completed to create a three dimensional volume model of the tailings using surveyed topography and depths to base of tailings obtained from recent drilling. In the area drilled, this work has indicated a potential volume in the order of 2.8 million cubic metres of tailings contained. The area drilled only represents a subset of the total tailed area and has already indicated a volume greater than what was expected in overall. In-situ dry density test work is still to be completed which will allow a total tonnage calculation however an initial estimation of tonnage can be determined using a conservative density range of 1.5 t/m3 - 2.0 t/m3 (expected dry SG for copper cobalt quartz sand is >2.0 t/m3) resulting in a potential tonnage of tailings in the range of 4.2 Mt - 5.6 Mt. This potential volume is conceptual in nature and there has been insufficient exploration to determine accurate tonnage or data received to enable estimation of a mineral resource. It is uncertain if further exploration will result in the estimation of a mineral resource.

Cape Lambert Resources Limited (ASX: CFE) is a mineral exploration and development company with a diverse portfolio and exposure to cobalt, copper, iron ore, lithium, gold, uranium and lead-silver-zinc assets in Australia, Europe, Africa and South America.

Australian Securities Exchange

Code: CFE

Ordinary shares 1,011,734,914

Unlisted Options 15,336,363 ($0.07 exp 12 Mar 2020) 7,667,727 ($0.07 exp 19 Mar 2020) 5,250,000 ($0.04 exp 31 Mar 2020)

Board of Directors

Tony Sage Executive ChairmanTim Turner Non-executive Director

Stefan Müller Non-executive Director

Melissa Chapman Company Secretary

Cape Lambert Contact

Investor Relations Phone: [phone] Email:[e-mail]

www.capelam.com.au

Discussions with several potential project financiers have progressed as well as discussions with a major party for an offtake agreement for the cobalt hydroxide product (produced through a leach process).

The Company has also been approached by an Engineering, Procurement and Construction Management (EPCM) contractor that has offered to fund and build the Project, with the cost being repaid from production revenue. Discussions with this company are progressing with a firm costed proposal awaited.

Commenting on the progress so far, Chairman Tony Sage said "I am confident that financing and offtake agreements can be finalised in the very near future. I am also encouraged by the offer received for an EPCM contractor to fund the building of the leaching plant, which presents an alternative option to getting into production, so I look forward to receiving their proposal".

Yours faithfully

Cape Lambert Resources Limited

Tony Sage

Executive Chairman

Competent Persons Statement

The information in this report that relates to Exploration Results is based on information compiled by Mr Olaf Frederickson. Mr Frederickson is a Member of The Australasian Institute of Mining and Metallurgy (AusIMM) and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the "JORC Code"). Mr Frederickson is a consultant to Cape Lambert Resources. Mr Frederickson consents to the inclusion in the report of the Exploration Results in the form and context in which they appear.

Figure 1: Kipushi location map

Cape Lambert Resources Limited

ASX: CFE

Page 2 of 8

Figure 2: Drill Hole Locations overlain with volume model in blue.

Figure 3: 3D image of volume model.

JORC Code, 2012 Edition - Table 1 Kipushi Tailings

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Criteria	JORC Code explanation	Commentary
Sampling techniques • Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling. • Auger drilling used to take vertical samples. • Samples of varying length taken downhole dependent on auger penetration. • Samples were collected in plastics and placed into calico bags. • Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used. • Samples have been dried and sent to ALS for sample prep and analysis. • Aspects of the determination of mineralisation that are Material to the Public Report. • In cases where 'industry standard' work has been done this would be relatively simple (eg 'reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay'). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.
Drilling techniques • Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc). • Drilling conducted by auger with a shaft length of 1.4m and diameter of approximately 20 cm. • Dead stick technique employed.
Drill sample recovery • Method of recording and assessing core and chip sample recoveries and results assessed. • Sand sample removed manually from the auger flights and collected as a single sample for each length of auger penetration. • Measures taken to maximise sample recovery and ensure representative nature of the samples. • Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.
Logging • Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies. • Samples were logged for colour, grain size, moisture, clay content. • Logging was qualitative.

Sub-sampling techniques and sample preparationQuality of assay data and laboratory testsVerification of sampling and assayingLocation of data points

JORC Code explanation

• • Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

• • The total length and percentage of the relevant intersections logged.

Commentary

• • If core, whether cut or sawn and whether quarter, half or all core taken.

• • If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.

• • For all sample types, the nature, quality and appropriateness of the sample preparation technique.

• • Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

• • Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

• • Whether sample sizes are appropriate to the grain size of the material being sampled.

• • All samples were partially wet but were competent to the touch. The material was in the form of stratigraphically layered non saturated tailings of fairly uniform consistency.

• • The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

• • For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

• • Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.

• • Samples sent to ALS lab.

• • Results pending.

• • The verification of significant intersections by either independent or alternative company personnel.

• • The use of twinned holes.

• • Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

• • Discuss any adjustment to assay data.

• • No verification work has been conducted.

• • Test pits alongside some drilled holes have been used in place of twinned holes.

• • Results pending.

• • Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

• • Specification of the grid system used.

• • Drill holes were located with handheld GPS.