Element 25 : PFS Metallurgical Drilling Update

PFS Metallurgical Drilling Update

Highlights

ASX ANNOUNCEMENT 26 FEBRUARY 2019

• • Thirteen PQ3 diamond holes completed for geotechnical tests and to provide approximately 2.4 tonnes of sample for metallurgical testing.

• • Test work programme designed to provide detailed geo-metallurgical information for the Pre-Feasibility Study.

• • Drillhole locations designed to provide data across the first twenty years of the mine plan, focussing particularly on the first five years.

• • The test programme will provide further product samples for despatch to potential end users to facilitate further offtake discussions.

• • Drill core has arrived in Perth for the commencement of the test programme.

Element 25 Limited (E25 or Company) is pleased to advise that the diamond drilling programme to extract bulk sample material for definitive metallurgical test work has been completed. Thirteen drill holes were completed yielding an estimated 2.4 tonnes of representative metallurgical sample material from within the initial twenty-year mine plan area.

The test programme has been designed to further demonstrate the scalability of the processing flowsheet developed in conjunction with the CSIRO as well as providing detailed information for process plant design. The flowsheet efficiently extracts manganese (approximately 95% extraction in 30 minutes at room temperature and pressure) into solution to produce high purity manganese including battery grade manganese sulphate (HPMSM) and High Purity Electrolytic Manganese Metal (HPEMM).

Figure 1: Diamond Drill Rig.

Company Snapshot

ASX Code: Shares on Issue: Share Price:

Market Capitalisation:

Element 25 Limited P [phone]

[e-mail] element25.com.au

E25 84M $0.18 $15.1MBoard of Directors: Seamus Cornelius Justin Brown John Ribbons

Level 2, 45 Richardson Street, West Perth, WA, 6005

PO Box 910 West Perth WA 6872 Australia

Chairman ED

NED

Element 25 Limited is developing the world class Butcherbird manganese project in Western Australia to produce high purity manganese sulphate for lithium ion batteries and electrolytic manganese metal.

Page 1

The work was completed as part of the ongoing Pre-

Feasibility Study scheduled for completion in 2019. A total of thirteen diamond holes were completed for 340.1m.

Three of the holes were drilled for geotechnical assessment of the planned wind farm outside the mining area, the remainder were drilled to inform the pit design process and to provide sample for detailed metallurgical test work.

774,092

Northing

• BBDD030 33.4

  7,298,000

  630.9

  • 90 -70

• BBDD031 36.4

  774,092

  7,298,200

  627.4

  • 90 -70

• BBDD032 40.7

  774,292

  7,297,800

  640.1

  • 180 -70

• BBDD033 30.4

  774,492

  7,298,000

  626.5

  • 360 -90

    Figure 2:

    Drill core laid out for logging.

• BBDD034 22.9

  774,492

  7,298,400

  622.5

  • 180 -70

• BBDD035 21.5

  774,692

  7,298,200

  621.8

  • 360 -90

• BBDD036 23.9

  774,892

  7,297,800

  621.8

  • 180 -70

• BBDD037 18.5

  775,292

  7,298,000

  616.3

  • 180 -70

• BBDD038 16.9

775,892

7,298,000

611.5

• 180 -70

  • BBGT001 19.9

    775,290

    7,297,640

    615.5

• 180 -70

  • BBGT002 19.7

    778,050

    7,297,675

    606.7

• 360 -90

  • BBGT003 31.9

    777,125

    7,295,545

    602.0

• 360 -90

  • BBGT004 24.0

  775,310

  7,295,120

  603.7

• 360 -90

Total 340.1

Table 1:

Drillhole collar location information

Figure 3:

Manganese bands within weathered clays.

About the Butcherbird High Purity Manganese Project

The Butcherbird High Purity Manganese Deposit is a world class manganese resource with current JORC resources in excess of 180Mt of manganese ore1. The Company has completed a positive scoping study with respect to developing the deposit to produce high purity manganese sulphate for lithium ion battery cathodes as well as High Purity Electrolytic Manganese Metal ("HPEMM") for use in certain specialty steels. A PFS is currently being completed and is expected to further confirm the commercial potential of the project.

The Butcherbird Project straddles the Great Northern Highway and the Goldfields Gas Pipeline providing turnkey logistics and energy solutions. The Company is also intending to integrate significant renewable energy into the power solution to minimise the carbon intensity of the project as well as further reducing energy costs.

1 Reference: Company ASX release dated 12 October 2017 (released under the Company's previous ticker MZM)

Mineral Resources

Classification	Tonnes (Mt)	Grade Mn (%)
Indicated	22.5	12.0
Inferred	158.3	10.6
TOTAL	180.8	10.8
Notes:
• Reported at 8% Mn cut-off

• • All figures rounded to reflect the appropriate level of confidence (apparent differences may occur due to rounding)

  Justin Brown

  Executive Director

  Company information, ASX announcements, investor presentations, corporate videos and other investor material in the Company's projects can be viewed at:http://www.element25.com.au.

Competent Persons Statement

The information in this report that relates to Exploration Results, Exploration Targets, Mineral Resources and Mineral Reserves is based on information compiled by Mr Justin Brown who is a member of the Australasian Institute of Mining and Metallurgy. At the time that the Exploration Results, Exploration Targets, Mineral Resources and Mineral Reserves were compiled, Mr Brown was an employee of Element 25 Limited. Mr Brown is a geologist and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is 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'. Mr Brown consents to the inclusion of this information in the form and context in which it appears in this report

Please note with regard to exploration targets, the potential quantity and grade is conceptual in nature, that there has been insufficient exploration to define a Mineral Resource and that it is uncertain if further exploration will result in the determination of a Mineral Resource.

The information in this report that relates to Mineral Resources is based on information announced to the ASX on 12 October 2017. Element 25 Limited confirms that it is not aware of any new information or data that materially affects the information included in the relevant market announcements, and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially changed.

Appendix 1 - JORC Code, 2012 Edition - Table 1 - Butcherbird Project Hydrometallurgical Test Work

Section 1 Sampling Techniques and Data

Criteria

Sampling techniquesDrilling techniquesDrill sample recovery

JORC Code explanation

Commentary

• • 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.

• • Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

• • 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.

• • Samples will be selected for metallurgical test work where they are considered to be typical in character to the mineable ore zones within the Yanneri Ridge Resource.

• • Whole PQ diamond core was used to maximise the volume of sample.

• • 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).

• • A Diamond Drill Rig was used for the metallurgical program with PQ sized core (85mm diameter).

• • Drilling was triple tube.

• • Method of recording and assessing core and chip sample recoveries and results assessed.

• • 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.

• • Recoveries are noted at the time of drilling and recorded in the MZM database.

• • Triple tubing was used to maximise ore recovery.

• • Close to 100% of core was recovered.

Criteria

LoggingSub-sampling techniques and sample preparationQuality of assay data and laboratory tests

JORC Code explanation

Commentary

• • 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.

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

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

• • All samples have been logged to a level of detail to support the mineral resource estimations.

• • Qualitative: Lithology, alteration, mineralisation.

• • The entire length of the hole is geologically logged.

• • All drill core is photographed.

• • 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.

• • N/A.

• • 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.

• • N/A