Cape Lambert Resources : Quarterly Activities Report and Appendix 5B

March 2019

Quarterly Report

1 May 2019

1 May 2019

QUARTERLY REPORT - 31 March 2019

Please find attached the Quarterly Activities Report and Appendix 5B for the period ended 31 March 2019.

Yours faithfully

Cape Lambert Resources Limited

Tony Sage

Executive Chairman

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

Australian Securities Exchange

Code: CFE

Ordinary shares 1,013,401,581

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)

15,000,000 ($0.03 exp 30 Jun 2021)

5,000,000 ($0.05 exp 13 Dec 2020)

10,000,000 ($0.075 exp 30 Jun 2019)

Convertible Notes 548,310 convertible notes

Board of Directors

Tony Sage

Executive Chairman

Tim 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

Cape Lambert Resources Limited

March 2019 Quarterly Report

ASX Announcement

Quarterly Report

Period Ended 31 March 2019

CORPORATE

Strategy and Business Model

Cape Lambert Resources Limited (ASX: CFE) (Cape Lambert or the Company) is an Australian domiciled mineral development company. Cape Lambert has interests in several exploration and mining companies, providing exposure to iron ore, copper, gold, uranium, cobalt, lithium and lead-silver-zinc assets in Australia, Europe, Africa and South America (refer Figure 1).

Cape Lambert's strategy is to acquire and invest in undervalued and/or distressed mineral assets and companies (Projects) and:

•improve the value of these Projects, through a hands on approach to management, exploration, evaluation and development; and

•retain long-term exposure to these Projects through a production royalty and/or equity interest.

Cape Lambert aims to deliver Shareholder value by adding value to these undeveloped Projects. If Projects are converted into cash, the Company intends to follow a policy of distributing surplus cash to Shareholders.

Figure 1: Group Structure March 2019

(ASX: CFE)

Exploration Projects

Marampa Iron Ore Project

CFE - 100%

Sierra Leone

Kukuna Iron Ore Project

CFE

Sierra Leone

Wee MacGregor Copper Project

CFE - 100%

Australia

Kipushi Cobalt Project

CFE - 35%

DRC

Investments in Listed Entities

Fe Limited (ASX: FEL)

37.29% interest

Iron Ore, Gold, Nickel (Yilgarn, Australia)

International Goldfields Limited (ASX: IGS)

18.82% interest

Gold (Australia / Cote d'Ivoire / Brazil)

Cauldron Energy Limited (ASX: CXU)

15.93% interest

Uranium (Australia / Argentina)

European Lithium Limited (ASX: EUR)

11.42% interest

Lithium (Austria)

Cape Lambert Resources Limited
March 2019 Quarterly Report	Page 2 of 8

ASX Announcement

Quarterly Report

Period Ended 31 March 2019

Cash Balance

As at 31 March 2019, the Company had approximately A$572k.

Trading Suspension

On 8 January 2019, the Company's securities were suspended from official quotation pending an announcement on the Project, and in particular the security of tenure over the Kipushi Cobalt-Copper Tailings Project (Project). The Company is currently liaising with ASX regarding the announcement relating to the Project to bring it out of voluntary suspension.

Loan Facility

On 12 March 2019, the Company entered into a loan of USD$500,000 (AUD$720k) from First Investments Holding Ltd secured by the Company's shareholding in European Lithium Ltd to three times the value of the loan, interest rate of 5% per annum and to be repaid 18 months from the date of advancement.

Financing Facility

On 17 December 2018, the Company announced that it has secured a A$7.5m finance facility with MEF I, L.P. (Magna or Investor) to fast-track the development of the Kipushi Cobalt-Copper tailings project in the DRC.

The A$7.5m facility allows the Company to ensure the development is funded whilst retaining the flexibility with our negotiations for either an offtake for a strategic partner which may result in alternative funding, such as a cash injection into the project.

An initial amount of A$750k was drawn down on 19 December 2018 and a further $0.75m will be available for drawdown pending the Investors ability to trade the Company's shares on the Frankfurt exchange with a further A$6m available in tranches upon the Company meeting key milestones relating to the Company's Kipushi Cobalt-Copper Tailings Project. Full terms and conditions of the convertible securities are included in the announcement released on 17 December 2018.

During the quarter, the Company repaid USD$66k (AUD$96k) of the Magna facility.

Investments

Kitwe Tailings Project - Zambia

In the June 2018 quarterly, the Company announced that it had executed anew share sale agreement with Zambian entity Australian Mining Company Zambia Limited (Seller or AMCZL), to conditionally acquire a 60% interest in exploration licence No 21853-HQ-SEL (Licence or Kitwe Project) (Acquisition). The Licence covers an historic cobalt-copper rich tailings dump located near Kitwe in Zambia. Completion of the Acquisition is subject to the payment of Milestone Payments (refer June 2018 Quarterly dated 30 September 2018).

After completion of review and interpretation of the assay data from the recent drilling programme the Company elected not to pay the milestone payments due and withdrew from the Kitwe Project.

Cape Lambert Resources Limited
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ASX Announcement

Quarterly Report

Period Ended 31 March 2019

PROJECTS

Marampa (100% interest)

Marampa is an iron ore project at the development stage, and is located 90 km northeast of Freetown, Sierra Leone, West Africa (Marampa or Marampa Project) (refer Figure 2). Marampa comprises one granted mining licence (ML05/2014) comprising 79.40km2 and one granted exploration licence EL46A/2011 - 159.78 km2 held by Marampa Iron Ore (SL) Limited, which is indirectly, a wholly owned subsidiary of Cape Lambert.

There is nothing to report for the quarter.

Dempsey Resources (100% interest)

Dempsey Resources holds the Kukuna Iron Ore Project located in Sierra Leone (Kukuna or Kukuna Project).

The Project is located 120 km northeast of Freetown in the northwest of Sierra Leone and consists of one exploration licence (EL22/2012) covering 68km2 (refer Figure 2). The licence is located 70km due north of the Marampa Project and the Pepel Infrastructure and comprises rocks that correlate with the Marampa Group stratigraphy known to host specular hematite mineralisation.

The Kukuna Project remains under care and maintenance.

Kipushi and Kasombo Copper-Cobalt Projects (JV with Paragon Mining SARL)

The Kipushi Cobalt Copper Tailings Project consists of a tailings dam located on PE 12347 and the Kipushi Processing Plant located adjacent mining licence PE481 (Kipushi Project), refer Figure 2. The project is located approximately 25km from Lubumbashi, the second largest city in the Democratic Republic of Congo (DRC. The Company has a 50/50 joint venture agreement with Paragon Mining SARL (Paragon) to develop the project (refer to ASX announcement dated 3 May 2017 for details of the joint venture arrangement). The joint venture company is Soludo Lambert Mining SAS (Soludo Lambert). Paragon has a 70% interest in the Kipushi Project via a contract it has with La Patience SPRL (Patience) that gives it the right to exploit and process the tailings from the Kipushi TSF and sell the product.

The Company is currently liaising with ASX regarding the announcement relating to the Project including an estimation of a maiden Jorc compliant resource.

Mining International Pty Ltd (100% Interest)

Mining International Pty Ltd (Mining International), is a wholly owned subsidiary of Cape Lambert. The Company holds tenure to 4 mining leases (which were excluded from the sale of the Leichhardt Copper Project) at the Wee MacGregor Project located 40 km southeast of Mt Isa in Queensland (refer Figure 4).

The tenements are located within in the Eastern Fold Belt of the Mt Isa inlier. The tenements are located in the Mary Kathleen Zone/Wonga Subprovince. This area is prospective for a variety of deposit types, most notably structurally controlled epigenetic copper and gold deposits.

Cape Lambert Resources Limited
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ASX Announcement

Quarterly Report

Period Ended 31 March 2019

Cohiba Minerals Limited (Cohiba) has a Farm-in agreement with the Company for mining licences ML 2504, ML 2773 and ML 90098, while Firebird Minerals Pty Ltd (Firebird) has a Farm-in agreement for mining licence ML 2771.

No activities were reported for the quarter.

Figure 2: Cape Lambert West African Iron Ore Interests

Cape Lambert Resources Limited
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